Global dairy prices rose to a nine-month high at a fortnightly auction held early on Wednesday but prices for the key product, whole milk powder, were largely flat.
The Global Dairy Trade (GDT) Price Index climbed 1.9 percent to an average selling price of $3,637 per tonne in the auction held in the early hours of the morning.
That suggested a 1.1 percent drop at the previous sale was a temporary dip and the gradual recovery in prices was back on track.
Gains were led by anhydrous milk fat, which rose 5.8 percent, while skim milk powder jumped 3 percent.
"Skim milk powder (SMP) was also stronger than expected," said Amy Castleton, dairy analyst at AgriHQ. "SMP likely found some support from less product being available."
However, whole milk powder, the most-traded item, was only up a touch at 0.2 percent.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation's gross domestic product.
But the tepid result for whole milk powder, the country's main goods export, and a rally in the U.S. dollar meant investors largely ignored the auction and the currency dropped to a six-month low of $0.6862.
A total of 18,161 tonnes was sold at the latest auction, falling 6.9 percent from the previous one, the auction platform said.
GDT Events, which runs the auction, is owned by New Zealand's Fonterra Co-operative Group Ltd , but operates independently from the dairy giant.
U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.
A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.
The next auction is scheduled for June 5.