LRP-Lamb Market Report 9 September 2013

The LRP-Lamb price index ended last week at $115.71 per cwt. This is up $0.98 from the index of $114.73 on August 26.

LRP-Lamb insurance price forecasts expiring September 9, 2013 were as follows:

Date Offered

Policy

Expected Ending Value

Actual % of Expected

6/10/2013

13-week

$91.73

126.1%

4/22/2013

20-week

$92.96

124.5%

3/11/2013

26-week

$94.18

122.9%

12/10/2012

39-week

$127.28

90.9%

The effective floor prices offered by LRP-Lamb coverage for policies expiring September 9, 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%

6/10/2013

13-week

$91.73

$85.268

$81.858

$77.747

$73.319

     

(1.872)

(0.702)

(0.223)

(0.061)

4/22/2013

20-week

$92.96

85.398

82.277

78.441

74.155

     

(2.912)

(1.383)

(0.579)

(0.215)

3/11/2013

26-week

$94.18

86.335

83.090

79.242

74.982

     

(3.135)

(1.670)

(0.808)

(0.358)

12/10/2012

39-week

$127.28

115.001

110.909

106.083

100.668

     

(5.919)

(3.641)

(2.107)

(1.152)

Only the 39-week expiring insurance coverage will pay any indemnity and it will pay an indemnity at the 95 % coverage level only. However, the net effective floor price at that coverage level was only $115.00 per cwt. indicating that it did not pay an indemnity large enough to cover the premium costs. The premium at that level was $6.803 with the producer share (87%) equating to $5.919 per cwt. The coverage price at the 95% coverage level was $120.92 per cwt. After the fact, the best a person could have done was not to insure lambs delivered on or about September 9, 2013.

LRP-Lamb price insurance coverage offered on 9 September 2013 is as follows:

Date Offered: 9 September 2013

Effective Floor Price (Coverage Price – Producer Premium)

     

(Producer Premium per cwt.)

Policy

End Date

Expected Ending Value

95%

90%

85%

80%

13-week

12/9/2013

$101.44

$94.299

$90.524

$85.974

$81.082

     

(2.071)

(0.776)

(0.246)

(0.068)

20-week

1/27/2014

$95.31

87.555

84.361

80.417

76.030

     

(2.985)

(1.419)

(0.593)

(0.220)

26-week

3/10/2014

$102.78

94.219

90.677

86.478

81.829

     

(3.421)

(1.823)

(0.882)

(0.392)

39-week

6/9/2014

$131.22

118.559

114.656

109.368

103.792

     

(6.101)

(3.444)

(2.172)

(1.188)

Compared to two weeks ago, the 13-week expected ending value is up $1.69 per cwt., the 20-week expected ending value is down $1.90, the 26-week expected ending value is up $2.95, and the 39-week expected ending value is up $0.84.

The expected ending value for 12/9/2013 is UP $6.78 per cwt. compared to the $94.68 per cwt. expected ending value for that date on 7/22/13 for a 20-week policy.

The expected ending value for 12/9/2013 is UP $20.02 per cwt. compared to the $81.42 per cwt. expected ending value for that date on 6/10/13 for a 26-week policy.

The expected ending value for 12/9/2013 is UP $2.56 per cwt. compared to the $98.88 per cwt. expected ending value for that date on 3/11/13 for a 39-week policy.

The current expected ending value for 12/9/2013 of $101.44 represents the HIGHEST expected ending value for that date to this point in time.

The expected ending value for 1/27/2014 is down $0.59 per cwt. compared to the $95.90 per cwt. expected ending value for that date on 7/29/13 for a 26-week policy.

The expected ending value for 1/27/2014 is down $5.78 per cwt. compared to the $101.09 per cwt. expected ending value for that date on 4/29/13 for a 39-week policy.

The current expected ending value for 1/27/2014 of $95.31 represents the lowest expected ending value for that date to this point in time.

The expected ending value for 3/10/2014 is down $7.68 per cwt. compared to the $110.46 per cwt. expected ending value for that date on 6/10/13 for a 39-week policy.

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