Live Sheep Reports
A trade negotiated between buyer and seller where the price is known at the time the deal is struck and will not change regardless of how the lambs perform. All that is needed for payment is weight.
The base price is not negotiated, only a method of arriving at a price based on some other price or value determining mechanism. The base price may or may not be known prior to slaughter and the intent is to price on a group basis rather than an individual basis. The final net price is usually determined after the application of premiums and discounts based on carcass performance. The producer has few if any options concerning the pricing once the formula is agreed to.
FORWARD CONTRACT PURCHASE
An agreement made in advance of slaughter where the base price is derived from some publicly available price and the final price may or may not be determined by applying a series of premiums or discounts. Since there is no CME or other future pricing mechanism as there is for other species, forward contract purchases for sheep are unusual. Included here are a few out front purchases at a firm cash price but with delivery beyond 14 days.
Lambs are reported as committed as soon as they are scheduled for slaughter.
Lambs are reported as delivered when they are unloaded at the plant.