Australian Consolidated Milk has thrown down the challenge to rival processors, announcing a record $7 a kilogram milk solids opening price.
Canadian giant Saputo, which has the biggest slice of south-west suppliers, on Wednesday announced an opening price of $6.80.
The company said it was pleased to offer a "strong opening price" which reflected improving export market conditions it expected to continue in the coming year.
Saputo also announced a step up to the farmgate milk price for the 2018/19 season, increasing the average price to $6.15 per kilogram milk solids.
Australian Consolidated Milk said its $7 kg/ms was a guaranteed minimum for the season, 40c/kg ms higher than the opening prices announced by Fonterra and Bega last month.
The new price replaces the guaranteed minimum price of $6.50 for 2019/20 announced in February.
"Since then the dairy market has improved and the Australian dollar has weakened," ACM general manager Peter Jones said.
The company is moving to a nine-and-three pricing system.
It will pay one price for shoulder milk during July-August and December-June, and a "spring" price for September-November.