The ANZ and ASB commodity indices provided some contrasting reading when they were released this week.
One said dairy prices fell last month and one said they rose.
The ASB reported its CBA New Zealand index eased in all denominations last week, with a drop in the dairy index the dominant mover.
ASB rural economist James Shortall said that since the last CBA report for the weekend ending December 11, the New Zealand indices had shown a 3.9% fall in the US dollar dairy index, a 2.3% fall in the sheep/beef index and a 1.5% fall in the New Zealand dollar.
Prices for Oceania dairy products had been easing over the past few weeks, as observed in the drop in Fonterra's whole milk powder auction last week.
The price drop was small compared with the strong lift in prices over the second half of last year.
"The prices on offer at present remain well above long-term averages. Prices are also at levels that mean dairying will once again become profitable for farmers in the United States and European Union.
"The risk is these higher prices will provide an incentive for these countries to increase production, creating over supply and another boom-bust cycle," Mr Shortall said.
The ANZ commodity price index ended last year with a 2.6% increase in December.
The cumulative rise over the calendar year was 30%, with the largest annual increases in commodity prices in dairy (up 50%), aluminium (47%) and sawn timber (40%).
Economist Steve Edwards said the index remained at lofty levels and was only 6% away from its record high recorded in July 2008.
Dairy prices moved up 3% in December and lamb was the last commodity to register a rise in price in the month, lifting 1.4%, according to the ANZ index.
As further confirmation that the global economy was on the mend, aluminium and sawn timber prices had both strengthened in nine of the last 10 months.
"These two commodities are closely linked to industrial production. As such, they provide a timely gauge of the pulse of the global economy," he said.
Aluminium prices were 65% above their February 2009 low and sawn timber prices were 56% above the level recorded in March.
Dairy prices increased for the sixth consecutive month and were now 81% above their low in February last year, Mr Edwards said.
