LRP-Lamb Market Report 12 August 2013

The LRP-Lamb price index ended last week at $116.54 per cwt. This is up $0.76 from last week’s index of $115.78.

LRP-Lamb insurance price forecasts expiring August 12, 2013 were as follows:

Date Offered	Policy	Expected Ending Value	Actual % of Expected
5/13/2013	13-week	$91.57	127.2%
3/25/2013	20-week	$98.81	117.9%
2/11/2013	26-week	$100.26	116.2%
11/12/2012	39-week	$137.20	84.9%

The effective floor prices offered by LRP-Lamb coverage for policies expiring August 12, 2013 were as follows:

			Effective Floor Price (Coverage Price – Premium)
			(Premium per cwt.)
Date Offered	Policy	Expected Ending Value	95%	90%	85%	80%
5/13/2013	13-week	$91.57	$84.841	$81.605	$77.575	$73.19
			(2.149)	(0.805)	(0.255)	(0.070)
3/25/2013	20-week	$98.81	90.312	87.239	83.283	78.788
			(3.558)	(1.691)	(0.707)	(0.262)
2/11/2013	26-week	$100.26	91.414	88.186	84.231	79.771
			(3.836)	(2.044)	(0.989)	(0.439)
11/12/2012	39-week	$137.20	123.007	118.969	114.009	108.333
			(7.333)	(4.511)	(2.611)	(1.427)

Only the 39-week expiring insurance coverage will pay any indemnity and it will pay an indemnity at the top three coverage levels. The net effective floor prices for the various coverage levels of the expiring 39-week contracts issuing an indemnity ranged from $123.01 per cwt. to $114.01 per cwt. Only the 95% coverage level and the 90% coverage level pay an indemnity large enough to cover the premium costs. The up-front premium costs ranged from $7.33 per cwt. to $2.61 per cwt. After the fact, the best a person could have done was to insure at the 95% coverage level on November 12, 2012.

LRP-Lamb price insurance coverage offered on 12 August 2013 is as follows:

Date Offered: 12 August 2013			Effective Floor Price (Coverage Price – Premium)
			(Premium per cwt.)
Policy	End Date	Expected Ending Value	95%	90%	85%	80%
13-week	11/11/2013	$93.27	$86.421	$83.12	$79.02	$74.548
			(2.189)	(0.820)	(0.260)	(0.072)
20-week	12/30/2013	$85.18	77.853	75.203	71.79	67.914
			(3.067)	(1.457)	(0.610)	(0.226)
26-week	2/10/2014	$85.73	78.16	75.412	72.024	68.205
			(3.280)	(1.748)	(0.846)	(0.375)
39-week	5/12/2014	$117.57	105.406	101.945	97.693	92.837
			(6.284)	(3.865)	(2.237)	(1.223)

Compared to last week, the 13-week expected ending value is down $1.80 per cwt., the 20-week expected ending value is down $2.49, the 26-week expected ending value is down $1.50, and the 39-week expected ending value is down $1.95.

The expected ending value for 11/11/2013 is down $1.82 per cwt. compared to the 20-week expected ending value posted on June 24. It is UP $16.00 per cwt. compared to the 26-week expected ending value posted on May 13. It is down $11.54 per cwt. compared to the 39-week expected ending value posted on February 11.

The expected ending value for 12/30/2013 is down $4.23 per cwt. compared to the 26-week expected ending value posted on July 1. It is down $15.23 per cwt. compared to the 39-week expected ending value posted on April 1.

The expected ending value for 2/10/2014 is down $14.25 per cwt. compared to the 39-week expected ending value posted on May 13.