Brexit uncertainty, rising costs and devastating floods have seen confidence among farmers drop once again.
According to the latest NFU member survey, the short-term confidence index, covering prospects for the next 12 months, fell by 11 points to its third-lowest level since the survey began in 2010.
The mid-term outlook, covering the next three years, has improved from its lowest ever level of -12 last year, but remains negative overall.
NFU president Minette Batters said the results, from more than 750 farmers, provide a “stark reminder” of the impact the recent political upheaval has had on the industry.
She reiterated the importance of a future trade policy that does not allow imports of food produced to standards that would be illegal in the UK.
The prolonged wet weather and devastating floods have dented the confidence of arable farmers in particular, who have been unable to harvest crops from autumn 2019 and plant this year’s spring crops.
Livestock farmers continue to struggle with low prices for beef and increasing pressure from the anti-meat movement, who are critical of the sector’s environmental record.
This is despite the fact the NFU has set the goal of reaching net zero greenhouse gas emissions across farming in England and Wales by 2040.
Uncertainty over the UK’s trading relationship with the EU and the rest of the world after the transition period, as well as rising input costs, are still among the main concerns for farmers.
Market access to the EU is a worry for livestock farmers, where 95% of sheepmeat exports head from the UK every year.
Mrs Batters said: “Brexit must be a catalyst for British farming not just to be the envy of the world, but to provide a gold-standard model for high-standard, high-quality, sustainable food production, and for our net zero ambition by 2040.
“Like all successful businesses, farmers need stability; they need the confidence to invest in their businesses and to increase productivity.
“For this to happen requires the right trading environment. Farmers are ready to rise to that challenge and seize the opportunities ahead.”