Figures published by the Department of Agriculture showed the total income from farming dropped from £290m in 2011 to £143m last year.
It represents a decrease of 52%.
Agriculture Minister Michelle O'Neill said a number of factors had contributed to the "shocking and deeply concerning" results.
She cited poor weather conditions during the growing season and a rise in feed costs, and said a strengthening of Sterling against the Euro had both adversely affected Single Farm Payment receipts and held back producer prices.
Farmers have described 2012 as one of the worst years this century and said it has seen some of their worst fears realised.
Harry Sinclair, president of the Ulster Farmers Union, said: "The scale and extent of the collapse in farm incomes in 2012 will leave many farming families questioning whether the food supply chain will ever deliver a sustainable income for them.
"Farmers are fed up with meaningless retailer advertising campaigns claiming that they support local farmers. These figures prove beyond doubt that farmers are in fact being taken for granted by retailers and food processors who were happy to ignore their plight during 2012.
"This attitude has to change urgently to secure a future for our farm business."
Ms O'Neill said she hopes the situation can be turned around this year.
"As painful as these events have been, we have to accept that world cereal harvests, local weather conditions and exchange rate movements are factors which fall completely outside our control," the Sinn Féin minister explained.
"Therefore, it is imperative that we continue to build an industry that has the strength and resilience to withstand such set-backs. I very much hope that this year will see a marked improvement in the fortunes of the industry and that we can once again turn our attention to the longer term challenges and opportunities that lie ahead."