Dairy prices have risen for the first time in six months in the overnight global dairy trade auction.
The average price was up 2.2 percent to $US2819 a tonne.
It was the first rise since May and lifts prices off two-year lows.
The price for whole milk powder, which has a key influence on local farmer payouts, rose 2.5 percent to $US2667 a tonne.
Prices for all other products offered rose except for cheese.
The amount sold was sharply lower which may have helped to lift prices.
"There was likely increased demand for WMP (whole milk powder) given the lower volumes on offer compared with the previous event," NZX dairy analyst Amy Castleton said.
Fonterra is due to release a first quarter trading update on Thursday with the prospect that it will lower its farmgate milk payout forecast from the current range of $6.25 to $6.50 a kilo of milk solids.
The dairy co-operative is reviewing its entire business and has said no options are off the table including the sale of assets, which has led to speculation about the future of its investment in the troubled Chinese firm Beingmate, as well as assets in Chile, Brazil, local ice-cream maker, Tip Top.