LMIC is a cooperative effort of 28 land-grant universities, 5 USDA agencies and 7 affiliate members (of which the Chicago Mercantile Exchange is one) that provides economic analysis and data services to its members. One of its longstanding and ongoing products is this series of seasonal indexes that provide insight into the intra-year price changes for, among others, the four livestock/meat commodities traded at the CME—-Live cattle (represented at left by LMIC’s index for Fed Steers), Feeder Cattle, Lean Hogs and Pork Bellies. Index charts for the last three appear below.

LMIC’s update that includes 2008 data do not, of course, differ much from past years. Averages over 10 year periods just do not change much when the oldest year is dropped and a new year is added. Annual updates of these indexes are not available until July of each year since the monthly indexes are centered on a 12-month data period. That means that June data must be available before the index for the previous December can be computed.

Ratios of the index values for any two months can be used to compute the expected seasonal change for the price in question. For instance, expected December fed steer prices can be calculated by using the December index value (100) divided by the July value (96) and multiplying by a July fed steer price. The result would be the December price estimate based on seasonal factors. Obviously, other factors could also influence the December price but these indexes allow seasonal impacts to be discerned quickly and easily.

Another interesting feature of the LMIC index graphs is the inclusion of the maximum and minimum indexes for the 10-year period. This information provides an idea of the dependability of these seasonal patterns over time. Note that the range from the minimum to the maximum for Fed Steers is generally 15 to 20 index points where the range for Slaughter Hogs (Figure 2) is hardly ever over 10 points. The narrower range for Slaughter Hogs suggests that their seasonal price pattern is more predictable and, theoretically, more useful for forecasting prices. The caveat to that statement, of course, is current hog prices which have defied the normal seasonal pattern this summer, primarily because of the impact that H1N1 influenza had on pork exports — a perfect example of the "other forces" that can confound the seasonal patterns.

A number of resources are available on the public portion of the LMIC’s website, www.lmic.info. These resources include a weekly Situation and Analysis section, weekly price and production data, a selection of graphs, links to useful USDA reports and direct links to the websites of many LMIC members’ — a membership that includes virtually all of the top public-sector market researchers and analysts.