Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 6/10/10

USDA lowered its 2010 price forecasts for cattle and hogs because demand has slackened, the agency said in its monthly World Agriculture Supply and Demand Estimates report.

USDA projected average steer prices (all grades, five-area direct) in 2010 at $92 to $96 per hundredweight, down from last month's range of $94 to $98.

It projected average 2010 prices for barrows and gilts (national base live equivalent for 51 percent to 52 percent lean) at $54 to $57 per hundredweight, down from a range of $55 to $57.

To put current hog prices in perspective, however, the CME Group's Daily Livestock Report pointed out that hog prices so far this year have been the highest in the past 10 years. "Even with the current decline, prices remain on the high side of the range," the report noted.

In terms of current cattle prices, the DLR said beef and dairy cow slaughter remain notably higher than a year ago, which could reflect producers taking advantage of the relatively high prices for slaughter cows to cash out.

"On the demand side, things do not appear to be quite as good as some had hope for," the DLRsaid, noting retailers' return to featuring cheaper beef cuts after Memorial Day and the negative impact of a relative abundance of chicken.

USDA slightly reduced its forecast for total U.S. meat production for 2010 to 90.02 billion pounds from 90.32 billion pounds a month ago.

The reduction reflected lower cattle slaughter and lighter cattle carcass weights in the second quarter and lower expected slaughter in the fourth quarter. Hog slaughter was also reduced for the second and third quarters, but slightly heavier carcass weights partially offset the decline in second-quarter slaughter, the report said.

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