Peter Kendall, NFU president, told delegates at the Devon County Show, that prices were unsustainably low for the beef and lamb sectors and unless processors and retailers secure their supply bases by offering producers long-term, forward priced contracts, the industry could go under.
The price of finished beef cattle has levelled off in the last 12 months and lamb prices recently plummeted.
The NFU claimed beef producers need at least an extra £1/kg to cover all costs and leave a small margin for re-investment and the price of finished lamb would need to increase by around 62p/kg.
Kendall said: "English beef and lamb is the finest in the world. It is in demand from consumers as never before, and its production makes a vital contribution to the management of the countryside and to the local and national economy.
"In a world in which demand for meat is growing faster than the ability to supply it, the medium to long-term economic prospects for livestock farming look bright.
"It would be nothing short of a tragedy if the red meat sector cannot maintain the critical mass of breeding animals to maintain supply in the short-term to take advantages of the opportunities that undoubtedly lie ahead."