Dairy famers in Western Australia's south have begun to dump milk after being unable to secure supply contracts.

Key points: Farmers "taking the brunt of the industry problem" amidst global oversupply of milk

Farmers "taking the brunt of the industry problem" amidst global oversupply of milk "Currently about 8,000 litres is going down the drain," Harvey farmer says

"Currently about 8,000 litres is going down the drain," Harvey farmer says He has had to sell 250 cows and "dry off" another 100

Earlier this year, nine farmers from WA's South West were told by milk processors Brownes and Harvey Fresh their produce was no longer required due to a global oversupply of milk.

Harvey farmer Graham Manning's two-year contract with Brownes expired on September 30, but he was given an extra two-week reprieve in a mystery deal struck by lobby group WAFarmers.

However, that arrangement has also lapsed and with no foreseeable home for his product, the fifth generation dairy farmer said he had no choice but to sell his cows and tip the milk out into an effluent pond.

"Currently about 8,000 litres is going down the drain for these three or four days while we organise to sell our cows," he said.

"It's taken me six months to come to terms with it.

"It's a corporate world we live in; we live in a deregulated industry and free market and that's the outcome of us being put out of the industry."

Mr Manning said he had 250 cows he would need to sell, and another 100 he was trying to 'dry off' to stop producing milk.

The Manning's dairy manager Matthew Kealy has had to supervise the dumping of the milk he helped produced. ( ABC News: Eliza Borrello )

"It's been a pretty rough time, but we've got to get through this," he said.

"We can't think too much about ourselves, it's just as important for us to deal with these cows.

"Hopefully we can sell them on to other farms."

Mr Manning said he feels for other farmers whose contracts with Harvey Fresh will expire in January 2017.

"This can't go on, we don't spend millions of dollars investing in the dairy industry as owners of our farm just to come out of contract and get chucked out of it," he said.

"You're not encouraging young farmers to come into this business and you don't encourage banks to lend money to farmers to get into our business.

"My wife Jane and I will become beef farmers — it's very expensive, but we'll take that challenge on and go with it."

Thousands of litres of milk being released into dairy farmer Graham Manning's effluent pond. ( ABC News: Eliza Borello )

Farmers 'taking the brunt' of market movements

WAFarmers dairy section president Michael Partridge said he was disappointed a solution could not be reached.

"We've been working on it for six months — we've had all the parties together, all the processors, retailers we've spoken to State and Federal Government, and for it to be at this level right now is absolutely devastating," he said.

"There's not much of a way forward for Graham and guys like him at the moment.

"We just need to make sure it can't happen to anyone else."

Mr Partridge criticised the parent companies of the two processors for their handling of the global oversupply issue.

"There's other ways to balance milk and control supply," he said.

"In the past, we've had contract volumes drop before across the board to all the farmers supplying a processor and everyone cuts a bit of a loss.

"For these ... farmers to take the brunt of the industry problem at the moment is absolutely disgusting."

Brownes has been contacted for comment.