General consensus that three years of history sufficient to calculate basis. For BFP want to calculate monthly basis given that basis will vary seasonally. Basis differences may determine whether hedging will cover cost of production. Dec 14.31 12.91 1.40 12.83 11.34 1.49 14.70 13.29 1.41 1.43 Avg. If in your order, milk use is in between these two extremes two basis could be calculated for each fluid versus hard manufactured products.
Some individuals use the lowest calculated basis for a given month rather than the average.
If the basis becomes greater, the net mailbox price is also greater by this same amount.