Dairy farmers across WA’s south west have reached a critical crossroad, with two very tough choices – sell up or battle on and risk losing it all.

Struggling farmers say the industry is as tough as it’s ever been and many are being forced to sell their milk at a loss.

The WA Farmers Federation has written to the state’s three milk processors pleading their case, saying producers need at least 5 cents a litre more to remain viable.

“The State requires a certain amount of fresh milk every day, which we do a very good job of producing that,” WA Farmers Dairy Section President Michael Partridge told 7News.

“We need to be rewarded for doing that part.”

Mr Partridge says it costs about 51.6 cents to produce a litre of milk but farmers only get around 51.3 cents for it.

In comparison, some farmers on the east coast are paid 73 cents a litre by two of the same processors which buy from WA producers.

The drought on the other side of the country is one of the major reasons for the trouble here, as hay and fodder prices have increased significantly, adding to the overheads for WA dairy farmers already operating on a knife-edge.

“There’s money in the supply chain but the farmers aren’t getting a fair share of that,” Mr Partridge added.

With less than 140 dairy farms left in WA, the Farmers Federation says the industry may need to get even smaller to survive.