U.S. hog and cattle prices are expected to be “sharply” higher than previously forecast during the summer because of tight supplies, government forecasters said.

Slaughter-ready hogs are expected to average $52 to $54 per hundredweight, up from a March estimate of $47 to $49, the USDA said. During the third quarter, hogs are forecast to average $53 to $57, up from a previous projection of $49 to $53.

Prices for “choice” grade slaughter-ready steers are projected to average $91 to $95 per hundred pounds during the second quarter, up from a previous estimate of $87 to $91, the USDA said in its monthly supply and demand report today.

In the third quarter, steers will average $89 to $95 per hundredweight, up from a previous estimate of $87 to $95, the USDA said.

The nation’s pork and beef producers reduced herds in recent years as the recession curtailed meat demand, with inventories of cattle on feed dropping to a seven-year low earlier this year. Prices for slaughter-ready animals have risen most of this year as meat processors competed for shrinking supplies.

“Cattle and hog prices were strong in the first quarter,” the USDA said in today’s report “Forecasts are raised sharply into the summer quarter as cattle and hog supplies are expected to be tight.”

The USDA also raised its forecast for U.S. corn supplies, citing smaller livestock herds.

Corn stockpiles at the end of the 2009-10 marketing year in August will total 1.899 billion bushels, up 100 million bushels from a March forecast and up 226 million bushels, or almost 14 percent, from 2008-09, according to the USDA report.

The USDA narrowed its project range for corn prices this year to $3.50 to $3.70 a bushel from $3.45 to $3.75 previously.