The NFU’s bi-annual farmer confidence survey has shown a negative score for the first time in its eight-year history.
Farmers’ mid-term confidence, which covers the next three years, has plummeted by nine points since last December and eight points since April this year.
Short-term confidence, which looks at the next 12 months, has increased by seven points since last December, but dropped four points since April this year.
The union is attributing the gloomy scores to steep rises in input costs, with fertiliser prices up 24 per cent, energy up 8 per cent and feed wheat and barley up 15 per cent on last year.
Political and economic uncertainty are also thought to be playing a role.
NFU economist Anand Dossa said: “We believe farmer confidence is critical to the future of a progressive, profitable and competitive industry, because it feeds through to investment decisions.
“We actually asked farmers how the EU referendum decision had changed their investment plans, and 20 per cent said they will decrease investment over the next 12 months.
“While we have benefitted from better prices, better BPS payments and better export prospects because of the devaluation of the pound over the last 18 months, medium-term confidence is being affected by uncertainty and the prospect of rising input costs.”