"Prices will be supported not only by reduced beef supplies but by strength in the world economy and some recovery in the U.S. economy, which will enhance demand. Recent high feed prices are expected to keep the hog industry from expanding and to cut into the previously expected 3 percent expansion in chicken production. Smaller supplies of competitive meats support beef prices," he noted.

According to Hurt, Nebraska finished steer prices averaged $93.75 in the first three quarters this year. That compares with an annual price of only $83.25 in 2009 when recession deflated demand. Assuming the prices in the final quarter of 2010 are about $98, 2010 will have reached a new record price of $94.80, exceeding the previous record high of $92.27 in 2008.

That record price is expected to be broken next year with Nebraska finished steers averaging in the low $100s. Prices are expected to be in the low $100s during the first quarter and then reach yearly highs in the second quarter when they may average about $105, he said.

"Expect prices to drop $2 to $4 per hundred in the summer quarter and then finish the final quarter of 2011 in the very low $100s. Price forecasts tend to have large errors so consider a range of at least 3 dollars higher or lower from these forecasts," he said.

Some analysts miss the fact that higher feed prices eventually are reflected in higher meat prices. In the beef industry, feed prices which began to move higher late in 2006, are now reaching consumers as record-high beef prices. Consumers are in for many years of much higher retail beef costs, he noted.

"The retail price so far this year has averaged $4.37 per pound, exceeding the previous record of $4.29 for the same period in 2008. Early forecasts of retail prices in 2011 are $4.60 to $4.65 per pound, an increase of about 6 percent over the 2010 record price," he said.

The lofty level for next year compares with an average retail beef price of $3.84 per pound for the five years from 2002 to 2006, before the period of much higher feed prices. To be fair, the added retail costs of beef is a combination of both higher farm-level values, mostly due to high feed costs and higher costs involved in marketing margins, he said.

Record finished cattle prices for 2011 and higher feed costs are tugging feeder cattle and calf prices in opposite directions. Stronger finished cattle prices push calf prices up while higher feed prices push them down. The winner of that battle will depend on the relative changes in finished cattle and feed prices, he said.

"Although cow-calf producers would have received much higher prices for calves without the recent increase in feed prices, they should hold on to their cow herds because record finished cattle prices and, hopefully, cheaper feed in the fall of 2011 should result in much higher calf prices, perhaps for multiple years to come," he said.