Hikes in the cost of animal feed mean that a large number of dairy farmers are losing money with every animal and litre of milk they produce.

With 11 billion litres produced annually across the country, this equates to a £330 million gap between production costs and the price farmers receive.

Pig farmers also say they are making big losses, with almost three-quarters saying they face having to quit the industry.

The plight of the different farm sectors has been highlighted in two reports on the two sectors which show a dire financial position.

South West Dairy Board chairman Paul Griffith, who farms near Okehampton, said: "These stark figures reveal the very desperate situation on many dairy farms – and won't be a surprise to the many farmers out there who are trying to make a living.

"The irony is that if dairy farmers had received their fair share of available market returns this year, we wouldn't be faced with such a staggering gap between the price we're paid for our milk and the cost of producing it.

"It is true that prices have started to move up – but some milk buyers have told their farmers to expect only a penny increase. That's a drop in the ocean given the scale of the price problem we are faced with. I'm seriously worried that for many dairy farmers it could be too little, too late."

The Cost of Milk Production Report, commissioned by the National Farmers' Union, shows an "unsustainable" gap of more than 3p per litre between the cost of producing milk and the average that farmers are paid for it.

At the same time the National Pig Association reports that 80 per cent of pig farmers are losing money on each animal they sell and 70 per cent say they will have to quit pigs in the next two years if they don't get a better price from supermarkets.

In both cases feed prices, already rocketing because of global demand-and-supply, are forecast to be 16.6 per cent higher by the end of the current financial year in April than in 2009-2010.

Coupled with bad weather and poor returns from retail chains, producers face the tough choice of whether to stay in business or give up.

The NFU report shows that, on average, dairy farmers are losing more than 3p on every litre of milk they produce.

The report shows that the biggest factor adding pressures is the increase in feed costs, which have shot up by 50 per cent in the past year.

Problems affecting global harvests last year had a disastrous knock-on effect in the feed stores throughout the country. The failure of the Russian harvest and resulting grain export ban, together with droughts in parts of Europe and North America, saw an increase in British wheat exports, leading to lower domestic stocks.

Feed wheat prices have risen steadily since the summer, and are around 66 per cent higher now than a year ago – with futures markets trading feed wheat for midsummer at a record high of £200 a tonne.

According to the NFU report, the average cost of milk production is currently 29.1p per litre while payments average only 25.94ppl.

Pig farmers, faced with making huge losses because of the high cost of feed – some losing up to £20 on every pig they sell – have launched a multi-million pound advertising campaign to remind shoppers to buy high-welfare British pig meat.

They will be using roadside fields to display 15-foot banners with slogans such as "Yes! Yes! Yes! to British Pork" and "Made in Britain – perfect British bacon".

Barney Kay, of the National Pig Association, said: "To meet the increased demand caused by the campaign, supermarkets will need to pay pig farmers enough to cover the cost of producing high-welfare pork."