It means your borrow cost is greater than your earning from your deposit and farming positions. When this happens, it may make sense to reduce your borrow positions.
Is it possible for an LP pool to generate a negative APY?
Yes. This happens when the cost of borrowing is greater than the expected farming APY of that pool. However, if you are using your own deposit to perform farming, then you can actually farm without borrowing additional tokens. If that is the case, you may not incur additional borrow cost.
What is your Net Deposit?
Your net deposit is how much you've deposited (LPs also count as deposits) minus how much you have borrowed.
When you deposit or borrow directly in the Lend tab, your net deposit will correspondingly increase or decrease. When you perform X-Farming, however, since your deposit and borrow increase by the same amount, your Net Deposit does not change (or only changes by a very small amount).
What is your Net APY?
Net APY shows the amount you are expected to earn over a year, divided by your net deposit. Note that when you perform farming in the X-Farm tab, your net deposit does not change (see previous question), but your Net APY will change as a consequence of the added borrow position and LP farming position.
What is Max Net APY vs. Net APY Change vs. Final Net APY, and why are they so different?
On the X-Farm tab, each pool has a "Max Net APY". This Max Net APY is computed on these assumptions:
User deposit contains USDT or USDC only (these have the highest LTV)
User performs farming on this LP pool to his maximum permissible leverage
This number is not very accurate for you if your account consists of a mix of different deposits, or if you have no intention of using maximum leverage.
Instead, the more accurate APY numbers for you are "Net APY change" and "Final Net APY".
Here, Net APY Change indicates how much your Net APY will change if you enter into this new farming position. And Final Net APY is just your current Net APY plus this change.