SPREADSHEET-BASED DECISION MODELS USING FUTURES AND OPTIONS

The file Futures_options_strategies.xls contains a series of 8 worksheets that provide you additional background material for the strategies introduced in the Hedging and Options Strategies Section. These worksheets have been designed for use by milk producers wishing to manage their price risk. You may change these models to more accurately reflect your situation. To examine the impact of changes in alternative settle prices, you should only have to change the data contained in the DATA INPUT section of the spreadsheets.

Ths file Milk_Basis.xls shows you how to calculate your mailbox/BFP basis. Note in this example, we standardize your mailbox to a 3.5% basis using a second worksheet contained in this file.  You do not necessarily have to standardize you milk to 3.5% fat content in order to use this spreadsheet.