Fonterra has upped the ante, announcing a $6.55 a kilogram milk solids 2020/21 opening price three weeks ahead of the June 1 deadline.
The price is 15 cents/kg MS higher than last year's opening price and just 5c/kg MS shy of the company's highest ever opening price.
It has also announced a new pricing structure, aimed at giving farmers more choice to better align milk prices to their milk production curve.
The Fonterra announcement is the second by a major processor, as they battle to hold onto milk supply.
Bulla made the first move in the opening price battle, announcing a $6.40-$6.90/kg MS price range last month.
Fonterra is forecasting a closing price range of $6.55-$6.95/kg MS.
Under the Mandatory Dairy Code of Conduct, all dairy processors are required to announce their new season price by June 1.
Fonterra Australia managing director René Dedoncker said good market conditions and a strong and well-performing business had given Fonterra the confidence to provide farmers with an early opening price.
The early price announcement and changed pricing structure were both in response to farmer requests.
"Coming out with a price early provides our farmers with a clear line of sight to help them make better decisions and plan for the year ahead," he said.