Chicago | Reuters — Chicago Mercantile Exchange live cattle futures firmed on Tuesday as supplies tighten, with beef packer margins falling into the negative for the first time in years, traders said.

Beef packers lost $14.35 per head on Tuesday, compared to earnings of $1.60 a day earlier and $18.40 the week before, according to Denver-based livestock marketing advisory service

Meatpackers slaughtered an estimated 128,000 cattle on Tuesday, the same pace as a week ago and up from 120,000 cattle a year earlier, according to the U.S. Department of Agriculture.

That beef packer margins have gone into the red “just tells you that the (cattle) numbers are tightening, and the feedlots have the upper hand,” said Don Roose, president of Iowa-based U.S. Commodities. “We’ve been (in) four years of liquidation, so it’s time to build the herd.”

But cattle future prices were capped by ongoing uncertainty over demand, said Dan Norcini, an independent livestock trader.

“As U.S. consumers become more concerned about rising prices, they tend to look for cheaper prices in the meat counter — and that impacts beef,” Norcini said.

Feeder cattle futures rose, bolstered by slumping corn futures, while lean hog futures ended down on profit-taking as investors awaited fresh news to gauge demand levels, traders said.