The figures show a 13 per cent fall in incomes for dairy farmers. Similarly, the livestock sectors have suffered, with incomes on pig farms forecast to be down by 23 per cent and on poultry farms by 12 per cent. Forecasts indicate that grazing livestock farms are showing signs of recovery.

However, even with increases in income across the beef and sheep sector, profitability still remains at a very low level, with farm income in this sector projected to sit around £16,000. A marginal increase in incomes is also expected in cereal farm income.

NFU president Meurig Raymond said: “2014 has been a year where, across commodities, the industry has seen falling farmgate prices and these figures are the first official ones to indicate the financial impact on farmers.

“This challenging situation is particularly true for the dairy industry, where some farmers have seen dramatic cuts in the price they receive for their milk and where the difficult market conditions could force many out of the industry. I’m afraid this snapshot doesn’t fully capture the desperate situation faced by some farmers. The average figures mask the breadth of milk prices currently received by dairy farmers or the cash flow challenges that farmers face in the coming months.

“However, volatility is not entirely unique to the dairy sector. The price received by farmers for pig meat, wheat, potatoes, and oilseeds also plummeted in 2014. With the extent of those price shifts, alongside a stronger pound, it’s not surprising that farm incomes are down and at the same we see the confidence of farmers falling.

“Ultimately, having a financially viable business gives farmers the confidence to invest in the future and build resilience. With less than 100 days to the General Election, it’s clear that there is a vital role for the future government to work with farmers to support growth and send the right business signals to invest. The NFU has outlined a number of policy asks which are laid out in our Election manifesto.

“The opportunities for UK farming are clear – in the longer term global and domestic demand will increase. But for British farmers to benefit, we need the right policy and fiscal environment across government which encourages the sector to increase efficiency, develop and embrace technological advances, and take a long-term balanced view to investment.”