Anyone with a feed bill and pair of fencing pliers knows 2009 was less than a banner year for the cattle business.

According to the December “Agriculture Income and Finance Outlook” from the USDA Economic Research Service (ERS), net farm income is projected to decline by 34.5% for 2009. Net cash income is expected to decline 28.4%, and net value added by 20%.

Beef cattle producers beat the average, but not by much: net cash income is expected to be down 26.2%. Specifically, ERS projects livestock receipts to decline 12%, with cash expenses 8% lower.

“For 2009, fed-cattle prices (Five-Market) averaged just over $83/cwt., about $9.50/cwt. below 2008’s and the lowest annual average since 2002,” say analysts with the Livestock Marketing Information Center (LMIC). “On a weekly basis, fed-cattle prices peaked in April at just over $88/cwt., but then seasonally declined to the low $80s/cwt. during the summer months and generally remained at the level for the balance of the year. Calf and yearling prices at major markets were below the prior year in the first quarter of 2009 and remained so until the fourth quarter. For the year, Southern Plains yearling steer (700-800 lbs.) prices averaged just over $97/cwt. and steer calf (500-600 lbs.) prices averaged just below $110/cwt.; both yearling and calf prices were the lowest annually since 2003.”

However, it’s also true that the industry remains better heeled financially than many.

Speaking to the aforementioned decline in annual farm income, Murray Wise, founder and CEO of Westchester Group, Inc., a leading agricultural asset management firm, said last week, “The agriculture industry has, in general, outperformed many other world industries throughout this global recession. Farm income in 2008 was one of the highest on record and a decrease should have been expected… There is so much capital looking for a home in agriculture that this will have little impact… Even today many investors are turning to agriculture as a viable investment. While many of us continue to invest our money in money markets currently earning only 0.31%, agriculture continues to offer its investors a 3% to 4% return.”

Analysts with the Economic Research Service said in December’s “Agricultural and Income Finance Outlook,” that “Farm financial ratios monitoring liquidity, efficiency, solvency and profitability show that the sector’s financial performance is quite favorable overall when compared to the 1981-86 farm financial crisis years. But these ratios reveal a modest decline in overall financial performance relative to 2008. The share of crop farm operations classified as vulnerable will likely remain fairly stable at about 1% in 2009. The largest change for any farm type will likely be for dairy operations where the share of vulnerable farms may more than double in 2009, to over 5% of all dairy farm businesses.”