Chicago Mercantile Exchange (CME) live cattle futures set a record high for the third consecutive session on Thursday as producers held out for higher prices from meatpackers searching for supplies, Reuters reported, citing brokers.

Strong cash prices and tightening supplies have pushed futures above a 2014 record for the front-month contract, after ranchers reduced herds due to high feed costs and drought in the western US.

Prices may still reach new peaks as supplies are expected to decline further in the second half of the year, analysts said.

"We're already in record high territory and this is early in the game," said Cassie Fish, an analyst and beef industry expert.

April live cattle futures touched a record of 177.700 cents per pound for a front-month contract before ending up 1.225 cents at 175.500 cents per pound. June live cattle finished 0.350 cent lower at 164.500 cents per pound after reaching a life-of-contract high of 166.275 cents.

CME feeder cattle futures also set contract highs before finishing mostly lower.

Some cattle traded in the cash market for about $180 to $181 per hundredweight (cwt) in Nebraska and Iowa this week, up from about $175 per cwt last week, brokers said. However, cattle feeders were declining packers' offers for $183 per cwt and holding out for even higher prices.

Cattle in states like Nebraska have suffered through harsh cold and snowy weather that slowed their weight gain. These conditions contributed to smaller-than-expected supplies of animals available for slaughter, brokers said.

Still, meatpackers are making money processing cattle into beef amid solid consumer demand.

Estimated margins for processors hit $86.85 per head of cattle, up from $66.80 on Wednesday and $80.75 a week ago, HedgersEdge.com said. Prices for choice and select cuts of boxed beef increased, the US Department of Agriculture said.

In the pork market, CME April lean hogs set a contract low of 71.500 cents per pound before finishing 0.700 cent lower at 71.600 cents per pound.