Volume: 3, 2024
3rd International PhD Student’s Conference at the University of Life Sciences in Lublin, Poland:
ENVIRONMENT – PLANT – ANIMAL – PRODUCT
Abstract number: P018
DOI: https://doi.org/10.24326/ICDSUPL3.P018
Published online: 24 April 2024
ICDSUPL, 3, P018 (2024)
The influence of market conditions on the profitability of winter wheat production
Rafał Wnuczek1*
1 Department of Economics and Agribusiness, Faculty of Agrobioengineering, University of Life Sciences in Lublin, Akademicka 13, 20-950 Lublin, Poland
* Corresponding author: rafal.wnuczek@up.lublin.pl
Abstract
Grains constitute the most important group of crops in Poland, which is reflected in their high share in the sowing structure. In the years 2020–2021, this share exceeded 68%, whereas in 2022, it decreased to 65.6%. According to data from the Central Statistical Office [2022], the number of agricultural holdings engaged in cereal production in 2020 was 962.3 thousand, accounting for 88.3% of all agricultural holdings involved in crop cultivation. They thus represent an important source of income for a significant group of agricultural holdings and are strategically important for the country’s food economy. The aim of the study was to assess the profitability of winter wheat production under different market conditions resulting from the effects of the Covid-19 pandemic and the war in Ukraine. The research hypothesis assumes that due to unfavorable market conditions, the profitability of winter wheat production in the years 2022–2023 significantly decreased compared to previous years. The study utilized a case study method. The research subject was an agricultural holding located in the Lublin Voivodeship, engaged in, among other things, cereal cultivation. The research covered the years 2021–2023. The findings showed that the last year of the study was very unfavorable for cereal producers, partly due to the influx of cereals from Ukraine to Poland. If the farmer did not receive subsidies, they would have incurred a loss in winter wheat production in 2023 (–427.1 PLN/ha). A comparison of the profitability of winter wheat production in the studied years demonstrated a significant decrease in profitability caused by a significant drop in purchase prices. In 2021, income from subsidies amounted to 6383.33 PLN/ha, in 2022 it was 5941.56 PLN/ha, and in 2023, it was only 833.83 PLN/ha. The high level of profitability in 2022 was achieved thanks to subsidies for sold grain (3025 PLN/ha). The research highlighted the importance of monitoring incurred costs and achieved revenues for making production decisions, as well as how these decisions are made in unstable conditions.
Keywords: profitability, cereal cultivation, winter wheat, costs, operating income
How to cite
R. Wnuczek, 2024. The influence of market conditions on the profitability of winter wheat production. In: 3rd International PhD Student’s Conference at the University of Life Sciences in Lublin, Poland: Environment – Plant – Animal – Product. https://doi.org/10.24326/ICDSUPL3.P018