Contract farming is an effective way for small farmers to connect to modern agriculture, and it is also the leading form of agricultural industrialization in China. This paper constructs a theoretical analysis framework on the impact of contract farming on farmers" income, and empirically examines the impact of contract farming on farmers" income and its mechanism of action by using micro-survey data of 610 beef cattle farmers and applying the propensity score matching method. The results showed that participation in contract farming significantly increased farmers" income levels, and both sales contracts and production management contracts significantly increased farmers" income, with production management contracts having a greater impact. The analysis of group differences found that contract farming had heterogeneous effects on farming years, farming scale and farming training on the income of farmers in different groups. Farming cost and farming technology play a significant mediating role between contract farming and farmers" income, i.e., contract farming promotes farmers" income through scale effect and technology effect. Farming relay plays a positive moderating role in the process of contract farming on farmers" income enhancement. Accordingly, the following suggestions are made: the government should actively create favorable conditions to encourage and guide the development of contract farming; improve the benefit distribution mechanism between companies and farmers according to the characteristics of farmers" resource endowments; promote the promotion and application of new technologies through the "dry school" effect; and promote "the separate rearing of females and the rearing of young animals" in contract farming. In contract farming, we are promoting the relay farming operation mode of "female livestock rearing and fattening" to promote the sustainable and high-quality development of the livestock industry.