The firmness in pricing was aided by the weakness in the New Zealand dollar against its American counterpart, 4.3% down on its 10-year average.
ASB rural economist Nathan Penny said the strength across the majority of commodity sectors was what marked 2017 out as ''special'', and looking at 2018, Mr Penny expected the broad price strength to continue at least through the early part of the new year.
However, Fonterra's last GlobalDairyTrade auction yesterday ended the year on a sour note, with a decline in the price of whole milk powder leaving the overall index down 3.9%, and the average price fell to $US2969 ($NZ4157).
It was the fifth decline during the past six auctions and became lowest price level struck since October last year.
A fortnight ago, Fonterra cut its 2017-18 forecast payout by 35c to $6.40 per kg of milksolids.
Mr Penny said butter and milk fat prices had been ''on a tear'' during 2017, noting butter and anhydrous milk fat prices respectively set 10 and six auction record highs, during the year.
However, the pricing limit for consumers appeared to have been reached, he said.
''In other words, butter and milk fat prices became too high for consumers ... who have reduced their demand,'' he said yesterday.
Mr Penny anticipated butter and general dairy prices would stabilise and the 25% price fall was likely to encourage consumers to restart buying. Some price stabilisation in early 2018 was expected.
On the overall commodity index, Mr Penny said while beef was the star performer against the 10-year average, up 18%, lamb prices now were 32% higher than December last year.
Mr Penny said the bank's commodity price index had ''largely held its ground'' during the year.
''Indeed, in New Zealand dollar terms, the index ended 0.7% above where it started the year, while in US dollar terms the index has ended just 1.3% below the level at the start of the year,'' he said in a statement.
Beef prices were the ''star'' for 2017, having tracked more than 18% above the 10-year average in US dollar terms, closely followed by forestry prices, not far behind at more than 17% up.
''Meanwhile, lamb prices have been strong since the autumn, after a modest start to the year,'' Mr Penny said.
While lamb prices started the year effectively at the same level as the previous year, Mr Penny said they were now about 32% higher than last December.
''The average level over 2017 has been comfortably above the 10-year average in both US dollar, 4.0% and NZ dollar, up +9.1%,'' he said.
However, wool was hard hit in both American and New Zealand dollar terms, down respectively 28% and 24%, against the 10-year average.
Dairy prices had weakened during the past few of Fonterra's GlobalDairyTrade auctions
Mr Penny said while dairy prices had tracked near their 10-year averages for most of the year, dairy prices had ended the year down in US dollar terms from a year ago.
