LRP-Lamb Market Report 30 September 2013

The LRP-Lamb price index ended last week at $122.20 per cwt. This is up $0.71 from the index of $121.49 on September 23, 2013.

LRP-Lamb insurance price forecasts expiring September 30, 2013 were as follows:

Date Offered Policy Expected Ending Value Actual % of Expected
7/1/2013 13-week $100.45 121.7%
5/13/2013 20-week $91.11 134.1%
4/1/2013 26-week $94.01 130.0%
12/31/2012 39-week $127.07 96.2%

The effective floor prices offered by LRP-Lamb coverage for policies expiring September 30, 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%
7/1/2013 13-week $100.45 $93.379 $89.632 $85.136 $80.293
(2.051) (0.768) (0.244) (0.067)
5/13/2013 20-week $91.11 83.696 80.644 76.873 72.679
(2.854) (1.356) (0.567) (0.211)
4/1/2013 26-week $94.01 86.181 82.943 79.103 74.852
(3.129) (1.667) (0.807) (0.358)
12/31/2012 39-week $127.07 114.811 110.725 106.462 100.510
(5.909) (3.635) (1.548) (1.150)

None of the LRP-Lamb insurance offerings expiring on September 30, 2013 offered protection above the actual ending price index of $122.20. After the fact, the best a person could have done was not to insure lambs for delivery on or about September 30, 2013. However, as always, one should consider the protection the insurance provides in terms of risk management.

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