WA dairy farmers are taking advantage of generous prices currently being offered by livestock companies for export dairy heifers.
Companies such as Landmark and Elders are offering near record prices for export animals as they scramble to meet international demand in a competitive procurement setting.
Current Landmark contracts sit at $1650 (incl $150 GST) for 200kg plus and $1430 (incl $130 GST) for 150-200kg.
While Elders International is currently offering in excess of $1650 (incl $150 GST) for 200kg plus for unjoined Holsteins and in excess of $1300 (excl GST) for 120kg plus for spot cattle.
According to Elders International procurement manager Scott Altschwager, limited availability of surplus dairy cattle was driving up export prices Australia-wide.
"Prices are being driven by supply more than anything else," Mr Alschwager said.
"Internationally we are seeing increased inquiry for export dairy cattle from Australia.
"By the same token there are only so many ships available to get them there and only so many cattle available.
"So there aren't more cattle going overseas, but prices are being driven by the fact that many dairy producers are looking at a better season and a stronger outlook.
"So farmers are probably retaining additional cattle to milk and that of course effects supply of young animals."
Speaking on WA in particular, Mr Altschwager said the number of cattle being milked in WA was decreasing.
"That has been a factor for quite some time, it hasn't happened overnight," he said.
"You have a pretty good season and a reasonable outlook for dairy products, and being self-sufficient domestically in WA, I believe there could be some potential issues around the level of production.
"Prices are also being driven by the fact that producers want to milk their cows and they haven't got the surplus heifers to sell."
Mr Altschwager said Elders International was currently looking to procure joined Holsteins, unjoined Holsteins and unjoined Jerseys in WA.
WAFarmers dairy section president Phil Depiazzi said some WA producers were selling surplus heifers because the price was right, while others were selling to maintain cashflow.
"The outlook for milk is fairly strong, the State is in a deficit so we definitely need milk down the track," Mr Depiazzi said.
"But unless farmers can get some positive price signals right now and going forward, then they are going to take advantage of the current export price.
"That is an issue for the State because we won't have the heifers coming in a year or two years time to produce the milk that is going to be required.
"The concern is that it will stifle future production because the cattle that will be used to produce milk in a year or two will be in China not WA."
Mr Depiazzi said producers needed signals that there would be benefits in the future from hanging onto heifers.
"The need is fairly immediate because there are guys out there that are having to sell heifers for cashflow who don't want to but might have not choice. That is why we need to get a decent price for our milk," he said.