The understanding of the role of using forest resources in the livelihood strategies of smallholder farmers is limited. Rural household surveys often omit this aspect. From a survey of 600 Indonesian cattle farmers, we apply the sustainable livelihood framework to investigate the role extracting forest resources has in livelihood strategies and household income. We also quantify which farmers’ characteristics impact the decision to extract them. Forest extraction appears a core livelihood strategy of farmers who rely in some way on forests, which are on average poorer. Our findings suggest that forest extraction increases with increased income diversification. Farmers who specialize as feeders in the cattle supply chain engage significantly less in that. The promotion of sustainable forest resource usage schemes, such as agroforestry or silvopastoral systems that facilitate, and support cattle breeding would maintain the supply of youngstock for feeders and contribute to sustainable future use of forest resources.