Knowing your basis is key to understanding how to use futures contracts to forward price milk. Pennsylvania dairy producers interested in locking in milk prices for a portion of a future delivery of milk must find a financial instrument to protect their milk price. This publication defines basis, explains its relationship to federal orders, describes mild components, and explains how to calculate basis and how to use basis in planning.
Dairy Risk-Management Education: Basis and Its Importance in Risk Management
Title Dairy Risk-Management Education: Basis and Its Importance in Risk Management
Number of Pages 6