Missouri Cattle Prices Rise - Tax Bills May Follow

By Blake Jackson

Cattle prices in Missouri continue their upward climb, with recent USDA Livestock, Poultry & Grain Market News reports showing a steady increase in feeder steer prices since 2015. While the rising prices can mean greater profits for cattle producers, they also come with a downside higher tax liabilities.

“High prices typically lead to increased profits, which is good news for cattle producers,” said Jacob Hefley, agricultural business specialist with University of Missouri Extension. “However, this also brings something most producers would rather not think about: a higher tax bill.”

The recently enacted 2025 budget reconciliation bill, also referred to as the “One Big Beautiful Bill Act,” includes several significant tax updates that could impact producers’ financial planning.

One major change is the permanent extension of bonus depreciation. Originally introduced under the 2017 Tax Cuts and Jobs Act (TCJA), 100% bonus depreciation was scheduled to be phased out by 2027. For 2025, it was expected to drop to 40%.

However, under the new law, 100% bonus depreciation will remain in place for qualifying property acquired after January 19, 2025. This provision enables producers to deduct the full cost of eligible assets in the year they are placed into service. Bonus depreciation is applied automatically unless the taxpayer chooses to opt out.

In addition, Section 179 expensing limits have increased. This tax provision also allows full expensing of qualifying purchases but must be elected. The annual deduction limit has risen to $2.5 million, up from $1.22 million in 2024, while the investment cap has increased to $4 million.

“The deduction and investment limit amounts will be indexed for inflation after 2025,” Hefley noted. These changes could benefit larger operations or those with heavy investment years.

Another important update is the indefinite extension of the Section 199A Qualified Business Income deduction. Initially set to expire in 2025, this deduction lets owners of pass-through entities deduct up to 20% of qualified income. “If you qualify, and many producers do, this could continue to lower your personal taxes for years to come,” Hefley said.

“The tax provisions outlined here cover only part of the new policy changes that may affect you,” Hefley said. “Even within the topics discussed bonus depreciation, Section 179 and Section 199A other rules and limits may apply depending on your operation.

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