US livestock prices are projected to surge in 2010 amid low inventories and slow growth of meat production.

US beef production in 2010 is expected to decline 1%, despite the USDA recently revising forecasts up from 11.68 million tonnes cwt to 11.72 million tonnes cwt, due to fed cattle marketing rising 2% in the first two months of this year, according to USDA World Agricultural Supply and Demand Estimates.

Monthly US beef production so far this year has declined 2% on the same period last year, attributed largely to a decline in cattle carcass weights.

Pork production forecasts have also been revised, but down from 10.18 million tonnes cwt to 10.14 million tonnes cwt – a decline of 3% on 2009. A smaller March inventory and slowed growth in the number of pigs per litter has contributed to the lower production volumes.

Amid tighter cattle and hog supplies, US livestock prices are expected to increase sharply into the US summer quarter this year. US Choice steer prices this year are forecast to average approximately 10% higher on last year, with prices for the second and third quarter to increase 10% and 11%, respectively.

Hog prices for 2010 are expected to average approximately 25% above year ago levels, amid lower production and increased exports. Broiler prices are also projected to increase approximately 6%, with declines of production and export forecast at 2% and 15%, respectively.