LRP-Lamb Market Report 19 August 2013

The LRP-Lamb price index ended last week at $115.67 per cwt. This is down $0.87 from last week’s index of $116.54.

LRP-Lamb insurance price forecasts expiring August 19, 2013 were as follows:

Date Offered	Policy	Expected Ending Value	Actual % of Expected
5/20/2013	13-week	$92.75	124.7%
4/1/2013	20-week	$94.67	122.2%
2/18/2013	26-week	$91.60	126.3%
11/19/2012	39-week	$130.83	88.4%

The effective floor prices offered by LRP-Lamb coverage for policies expiring August 19, 2013 were as follows:

			Effective Floor Price (Coverage Price – Premium)
			(Premium per cwt.)
Date Offered	Policy	Expected Ending Value	95%	90%	85%	80%
5/20/2013	13-week	$92.75	$85.934	$82.664	$78.581	$74.129
			(2.176)	(0.816)	(0.259)	(0.071)
4/1/2013	20-week	$94.67	86.531	83.58	79.792	75.489
			(3.409)	(1.620)	(0.678)	(0.251)
2/18/2013	26-week	$91.60	83.516	80.573	76.956	72.879
			(3.504)	(1.867)	(0.904)	(0.401)
11/19/2012	39-week	$130.83	117.297	113.449	108.72	103.299
			(6.993)	(4.301)	(2.49)	(1.361)

Only the 39-week expiring insurance coverage will pay any indemnity and it will pay an indemnity at the top two coverage levels. The net effective floor prices for the various coverage levels of the expiring 39-week contracts issuing an indemnity ranged from $117.30 per cwt. to $113.45 per cwt. Only the 95% coverage level paid an indemnity large enough to cover the premium costs. The up-front premium costs ranged from $6.99 per cwt. to $4.30 per cwt. After the fact, the best a person could have done was to insure at the 95% coverage level on November 19, 2012.

LRP-Lamb price insurance coverage offered on 19 August 2013 is as follows:

Date Offered: 19 August 2013			Effective Floor Price (Coverage Price – Premium)
			(Premium per cwt.)
Policy	End Date	Expected Ending Value	95%	90%	85%	80%
13-week	11/18/2013	$99.86	$92.537	$88.992	$84.602	$79.813
			(2.343)	(0.878)	(0.278)	(0.077)
20-week	1/6/2014	$97.32	88.946	85.925	82.023	77.602
			(3.504)	(1.665)	(0.697)	(0.258)
26-week	2/17/2014	$97.84	89.207	86.065	82.195	77.842
			(3.743)	(1.995)	(0.965)	(0.428)
39-week	5/19/2014	$128.50	115.202	111.425	106.775	101.464
			(6.868)	(4.225)	(2.445)	(1.336)

Compared to last week, the 13-week expected ending value is up $6.59 per cwt., the 20-week expected ending value is up $12.14, the 26-week expected ending value is up $12.11, and the 39-week expected ending value is up $10.93.

The expected ending value for 11/18/2013 is up $3.33 per cwt. compared to the 20-week expected ending value posted on July 1. It is UP $18.85 per cwt. compared to the 26-week expected ending value posted on May 20. It is up $3.68 per cwt. compared to the 39-week expected ending value posted on February 18. So, this is the best offering to date for the 11/18/2013 expected ending value.

The expected ending value for 1/6/2014 is down $8.98 per cwt. compared to the 39-week expected ending value posted on April 8.

The expected ending value for 2/17/2014 is down $10.01 per cwt. compared to the 39-week expected ending value posted on May 20.