LRP-Lamb Market Report 29 July 2013
The LRP-Lamb price index ended last week at $115.09 per cwt. This is up $0.58 from last week’s index of $114.51.
LRP-Lamb insurance price forecasts expiring July 29, 2013 were as follows:
| Date Offered | Policy | Expected Ending Value | Actual % of Expected |
| 4/29/2013 | 13-week | $96.50 | 119.3% |
| 3/11/2013 | 20-week | $99.41 | 115.8% |
| 1/28/2013 | 26-week | $103.76 | 110.9% |
| 10/29/2012 | 39-week | $128.10 | 89.8% |
The effective floor prices offered by LRP-Lamb coverage for policies expiring July 29, 2013 were as follows:
| Effective Floor Price (Coverage Price – Premium) | ||||||
| (Premium per cwt.) | ||||||
| Date Offered | Policy | Expected Ending Value | 95% | 90% | 85% | 80% |
| 4/29/2013 | 13-week | $96.50 | $89.416 | $86.001 | $81.751 | $77.126 |
| (2.264) | (0.849) | (0.269) | (0.074) | |||
| 3/11/2013 | 20-week | $99.41 | 90.861 | 87.769 | 83.789 | 79.266 |
| (3.579) | (1.701) | (0.711) | (0.264) | |||
| 1/28/2013 | 26-week | $103.76 | 94.601 | 91.265 | 87.176 | 82.556 |
| (3.969) | (2.115) | (1.024) | (0.454) | |||
| 10/29/2012 | 39-week | $128.10 | 114.853 | 111.078 | 106.442 | 101.148 |
| (6.847) | (4.212) | (2.438) | (1.332) | |||
Only the 39-week expiring insurance coverage will pay any indemnity and it will pay an indemnity at the top two coverage levels, although just barely at the 90% coverage level. The net effective floor prices for the various coverage levels of the expiring 39-week contracts issuing an indemnity ranged from $114.85 per cwt. to $111.08 per cwt. meaning that neither one pays an indemnity large enough to cover the premium costs. Their up-front premium costs ranging from $6.85 per cwt. to $4.21 per cwt. The best a person could have done under all of these scenarios is to not insure. Of course, this is with the benefit of after-the-fact knowledge of the market price index turning out to be $115.09.
LRP-Lamb price insurance coverage offered on 29 July 2013 is as follows:
| Date Offered: 29 July 2013 | Effective Floor Price (Coverage Price – Premium) | |||||
| (Premium per cwt.) | ||||||
| Policy | End Date | Expected Ending Value | 95% | 90% | 85% | 80% |
| 13-week | 10/28/2013 | $102.21 | $94.702 | $91.091 | $86.595 | No Offer |
| (2.398) | (0.899) | (0.285) | (0.000) | |||
| 20-week | 12/16/2013 | $98.08 | 89.648 | 86.592 | 82.688 | No Offer |
| (3.532) | (1.678) | (0.702) | (0.000) | |||
| 26-week | 1/27/2014 | $95.90 | 87.431 | 84.355 | 80.574 | 76.300 |
| (3.669) | (1.955) | (0.946) | (0.420) | |||
| 39-week | 4/28/2014 | $130.61 | 117.099 | 113.256 | 108.534 | 103.132 |
| (6.981) | (4.294) | (2.486) | (1.358) | |||
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