LRP-Lamb Market Report 18 November 2013

The LRP-Lamb price index ended last week at $140.73 per cwt. This is up $5.44 from the index of $135.29 on November 11, 2013.

LRP-Lamb insurance price forecasts expiring November 18, 2013 were as follows:

Date Offered Policy Expected Ending Value Actual % of Expected
8/19/2013 13-week $99.86 140.9%
7/1/2013 20-week $96.53 145.8%
5/20/2013 26-week $81.01 173.7%
2/18/2013 39-week $96.18 146.3%

The effective floor prices offered by LRP-Lamb coverage for policies expiring November 18, 2013 were as follows:

Effective Floor Price (Coverage Price – Producer Premium)
(Producer Premium per cwt.)
Date Offered Policy Expected Ending Value 95% 90% 85% 80%
8/19/2013 13-week $99.86 $92.832 $89.106 $84.638 $79.823
(2.038) (0.764) (0.242) (0.067)
7/1/2013 20-week $96.53 88.677 85.443 81.449 76.997
(3.023) (1.437) (0.601) (0.223)
5/20/2013 26-week $81.01 74.264 71.474 68.165 N/A
(2.696) (1.436) (0.695) (N/A)
2/18/2013 39-week $96.18 86.898 83.809 80.158 76.070
(4.472) (2.751) (1.592) (0.870)

None of the LRP-Lamb insurance offerings expiring on November 18, 2013 offered protection above the actual ending price index of $140.73. After the fact, the best a person could have done was not to insure lambs for delivery on or about November 18, 2013. However, as always, one should consider the protection the insurance provides in terms of risk management.

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