How to calculate seasonal index Pick time period

How to calculate seasonal index • • • Pick time period (number of years) Pick season period (month, quarter) Calculate average price for season Calculate average price over time Divide season average by over time average price x 100

Sioux Falls Cull Cow Prices Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual 2000 41. 70 41. 19 42. 38 46. 40 48. 25 47. 63 47. 50 43. 50 41. 70 38. 18 39. 00 41. 55 43. 25 2001 41. 56 43. 75 45. 15 46. 25 47. 75 49. 20 47. 63 47. 38 45. 45 42. 87 37. 50 38. 37 44. 41 2002 39. 10 41. 88 44. 06 42. 88 42. 45 41. 50 37. 67 37. 50 37. 88 35. 80 35. 38 35. 83 39. 33 2003 39. 20 40. 25 42. 50 45. 13 47. 75 46. 06 49. 96 49. 13 50. 50 48. 85 51. 83 49. 67 46. 74 2004 47. 10 46. 00 49. 88 53. 40 56. 38 60. 00 59. 50 59. 75 58. 00 54. 75 55. 50 52. 50 54. 40 2005 54. 25 55. 25 60. 30 61. 25 62. 75 61. 50 58. 25 54. 90 55. 63 52. 75 50. 90 52. 13 56. 66 2006 47. 13 49. 75 49. 80 47. 63 47. 80 47. 94 47. 75 49. 85 50. 25 48. 31 43. 06 41. 50 47. 56 2007 48. 50 52. 63 52. 00 52. 13 55. 50 54. 25 54. 08 55. 25 52. 88 53. 20 46. 25 48. 75 52. 12 2008 50. 00 55. 94 55. 69 54. 40 59. 38 58. 13 63. 35 63. 00 59. 00 53. 60 44. 75 41. 75 54. 92 2009 45. 63 46. 75 46. 88 49. 33 53. 17 45. 88 48. 63 47. 06 46. 90 44. 94 43. 08 45. 83 47. 01 45. 42 47. 34 48. 86 49. 88 52. 12 51. 21 51. 43 50. 73 49. 82 47. 33 44. 79 48. 64 93 97 100 103 107 105 106 104 102 97 92 92 100 Average Mon/Yr

Using Seasonal Index to Forecast • Observe price in time t 1 P 1 • Forecast price in time t 2 P 2 • Start with P 1/ I 1 = P 2 / I 2 • Then P 1 x I 2 / I 1 = P 2 • Assume that cows are selling at $50/cwt in November. What is the forecast of February?