Pig and poultry producers have taken the brunt of substantial cuts in farm incomes, according to Defra’s latest figures.

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While Defra’s farm business income forecasts for the year to February predict higher incomes for several sectors, intensive pig farms will be down by 20pc and poultry farms by 8pc.

According to the figures, dairy farmers are expected to see a 27pc increase in incomes. Grazing livestock farms should also see incomes improve, with a 30pc rise predicted for lowland grazing units. A marginal increase is also expected in cereal farm income.

National Farmers’ Union chief economist Phil Bicknell, said: “These forecasts are in contrast to the performance of the wider economy. They follow on from the improved confidence that we’ve seen in some farming sectors and build on other recent indicators that have underlined agriculture’s contribution to the wider economy. This is undoubtedly positive news for parts of the industry.

“But not all farm types saw improvements to their bottom line. Pigs and poultry saw profitability decline, as rising input costs, most notably feed, made inroads into enterprise margins. Higher costs will not be unique to pigs and poultry either. All farmers have faced significantly higher operating costs over the last year,” he said.

“It’s also reasonable to expect that these forecasts conceal much variation. Some parts of the country struggled with drought conditions in 2011. The impacts were relatively localised, but will have affected crop and fodder yields on individual farms.

“The farming industry remains susceptible to a range of factors. Even with some of the improvements indicated by these forecasts, we’re still talking about returns on assets in the range of 3-6pc across farm types.

“Amid continuing Eurozone uncertainty, farmers will be conscious of the link between farm profitability and changes in currency. Nonetheless, these figures and the long-term drivers for agricultural markets give cause for optimism, certainly when compared to other areas of the economy.”

Defra’s calculations of farm business income represents the financial return to all unpaid labour and on their capital invested in the farm business, including land and buildings.