Fonterra is expected to announce its opening milk price forecast for 2017-18 next week and economists are picking a conservative figure in the low-$6 range.
Westpac has upgraded its forecast to $6.50, following recent strength in dairy prices, while ASB and ANZ both have a $6.75 forecast.
Prices lifted at this week's GlobalDairyTrade auction, led by butter, which was up 11.2% while powders still posted gains.
The lift contrasted with indications from dairy futures and provided a chance of a lift for this season's $6 milk price, ASB senior economist Chris Tennent-Brown said.
It was very early days for forecasting next season and a wide range of prices was possible at this point.
But futures prices and auction contracts were starting to stretch out into the key part of the season and Fonterra's opening view would be an important ''scene-setter'' for the industry heading into winter, Mr Tennent-Brown said.
Westpac economist Sarah Drought said recent gains in prices had come against a backdrop of improving supply, especially from Europe and New Zealand.
Milk production was expected to continue trending higher over the remainder of the year, as farmers responded to higher farm-gate prices on offer.
Production in Europe had already risen notably off 2016's trough and more product would become available to global markets as New Zealand's 2017-18 season ramped up from September.
Import demand had also been improving in recent months, especially in China, and in other regions, such as Algeria and Mexico. Higher supply was still expected to weigh on global prices later this year.
Westpac was sticking with its $6 milk price forecast for 2016-17, in line with Fonterra's latest update.
But, for next season, the surprising recent strength in prices had resulted in a much better starting point, she said.
ANZ rural economist Con Williams said cashflow for the average fully-shared Fonterra supplier looked to be $5.75kg ms in 2016-17 and that was set to improve into the mid-$6kg ms in 2017-18.
With break-even for the sector in the low $5s, the sector was moving back into the black and spare cash should start to emerge later this year, Mr Williams said.
Debt repayment from the poor 2015-16 season would be a big focus. The sector accumulated about $1.50kg ms of debt during that period and that would need to be reduced to improve financial resilience.
However, there would be some natural uplift in spending, related to cyclical costs that swing with the milk price, such as supplementary feed, grazing and repairs and maintenance, and capital expenditure that was trimmed to unsustainably low levels during 2014-15 and 2015-16, he said.