Cattle and hog prices this year will be higher than forecast previously as rising beef and pork exports and improving domestic demand absorb expanding production, the U.S. Department of Agriculture said in an April 8 report.

Slaughter-ready steers in major U.S. cattle regions are expected to average $109 to $114 per hundred pounds, the USDA said in its monthly Supply and Demand report: That’s up from $105 to $111 in a March forecast and up from an average of $95.38 in 2010.

Fattened hogs are expected to average $62 to $65 per hundredweight in 2011, up from $59 to $63 in a March estimate and up from $55.06 last year, the USDA said.

“Meat supplies remain tight and improving domestic demand and strength in red meat exports are supporting prices for livestock and poultry,” the USDA said.

The USDA raised its forecast for 2011 U.S. beef exports by 50 million pounds, to 2.475 billion pounds, up 7.7 percent from 2010. Projected pork exports were left unchanged at 4.675 billion pounds, up almost 11 percent from last year.

“The relatively weak dollar and economic growth in a number of countries support export growth” in beef, the USDA said. “Conversely, the weakness in the U.S. dollar and economic growth in other major importing countries will limit U.S. beef imports.”

Beef production is running higher than previously forecast as increased cow and bull slaughter more than offsets slightly lower steer and heifer slaughter, the USDA said. Pork production was revised higher on slightly larger slaughter and higher-than-expected animal weights during the first quarter.

The USDA also lowered its forecast for U.S. milk production, saying relatively high milk prices “are being offset by high feed costs and only slight growth is expected in the herd for the remainder of the year,” the USDA said.

Class III milk is forecast to average $16.10 to $16.60 per hundredweight, down from $16.35 to $16.95 previously, the USDA said, a reflection of weaker cheese prices. The average all-milk price forecast was revised to $18.15 to $18.65 per hundredweight from $18.10 to $18.70.