The index lifted 0.5% in August, following seven consecutive monthly declines, although the number of commodities that dropped in price was greater than the number that rose.
Skim milk powder prices increased 5%, followed by beef, butter and whole milk powder prices, which all rose 3%. Wood prices fell 5% and wood pulp prices eased 3%.
Dairy prices have now lifted to a three-month high but remained 29% below the peak measured in March last year.
Last week, dairy giant Fonterra cut 30c from its previous forecast range for the 2012-13 season to $5.65-$5.75 but noted improving prices in recent GlobalDairyTrade trading events.
The recent turnaround in dairy prices might indicate that a floor had been reached in the international marketplace but that strength had been tempered somewhat by a strong New Zealand dollar, economist Steve Edwards said.
The rapid appreciation in wool, lamb and pelt prices experienced last year had been mirrored on the down side and prices for those commodities were now at levels not seen for nearly two years, Mr Edwards said.
Beef and Lamb New Zealand chairman Mike Petersen said sheep farmers' confidence had taken a knock. Lamb and mutton returns were well off the highs of 2011 and wool returns back to the prices of the "bad old days".
"There is no doubt that while the overall long-term outlook remains positive, the increased volatility we have been talking about is certainly the dominant theme in the short term," he said in a recent report.
Farmers needed to continue to work on improved productivity or efficiency on farm, to become more resilient and able to withstand the pricing volatility "that now appears to be the norm".
The message he was getting from recent farmer meetings was the need for clear and transparent market signals so farmers could plan ahead and make informed decisions.
Confidence in the future of beef, both in New Zealand and overseas, was very strong, although it appeared the store market had fully priced any upside in beef pricing between now and the end of the year.
The massive drought in the United States seemed set to dampen returns from beef in the short term, Mr Petersen said.
State-owned farming company Landcorp Farming recently forecast its net operating profit would halve in the 2013 financial year, from $27 million in the year to June this year, to about $13 million, due to the continuous negative impact of the global financial crisis on demand in European, North American and Asian economies.
It expected product prices in 2012-13 to be more volatile and generally lower than in the previous year. It also underscored that the New Zealand exchange rate would continue to have a major impact on income from exporting.
