There has been a considerable increase in farmers anticipating either no or low business growth, according to a new survey.
The National Association of Independent Accountancy Practices (MHA) produced a snapshot of attitudes in farming today, taken shortly before the EU referendum.
It found that farmers were concerned mostly about pricing and succession planning.
"This is the first time the survey has dipped into negative territory, and reflects a combination of poor prices and poor weather with correspondingly poor yields," David Missen, Head of the MHA agricultural sector said.
"However, the good weather in July and August together with currency movement post referendum has certainly helped to improve matters and the outlook for the reminder of the year is looking more positive.
"Clearly, 2016 has been a momentous year with the country deciding to leave the EU and the uncertainty of the vote at the time would have contributed to the general feeling of uneasiness within agriculture"
The survey also highlighted the “elephant in the room” that is Succession Planning - which continues to be of increasing concern to agricultural businesses.
Mr. Missen said the sooner families manage this situation the better for all concerned.
"All members affected by the succession issue should be involved in the process.
"This may be challenging for some families but it is crucial in order that misunderstandings are avoided"
Farm borrowing increases
Borrowing on UK farms has grown significantly and is relatively unchecked in recent times with a record £17.769bn in the year ending June.
The data shows a rise of £208m in overall agricultural borrowing which shows a continued trend year-on-year.
Historically borrowings normally fall around December time as farm subsidy payments make their way into the farmers' bank account.
Between 2009 and 2014, the drop is borrowing between November and December averaged 4.5%.
But increasing numbers of farmers are borrowing to ease cash flow problems with the Chair of the Environment, Food and Rural Affairs Committee Neil Parish MP saying farmers face 'extreme hardship' as prices for produce is low.
Increasingly volatile markets may mean farming businesses that are highly seasonal or have long profit cycles will need to think differently about managing their cash flow in the future.
NFU President Meurig Raymond said: "Cash flow problems are arguably the biggest threat for farm businesses at present.
"And the NFU has been working directly with the banks to ensure a positive dialogue continues in the face of external factors, outside of our control, which are having an impact on farmers’ bottom lines.
"Farmgate prices for key commodities are in a markedly different place than they were two years ago, leading to lower margins and profitability across the sector."
