Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics
Profitability is a complex notion, intertwined with theoretical, socio-economic, and modern economic considerations. While traditionally linked to monopoly advantages, contemporary views broaden this to include shareholder value creation. In agriculture, profitability faces impediments such as risin...
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MDPI AG
2024-10-01
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| Series: | Agriculture |
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| Online Access: | https://www.mdpi.com/2077-0472/14/11/1910 |
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| author | Agnieszka Bezat-Jarzębowska Włodzimierz Rembisz Sebastian Jarzębowski |
| author_facet | Agnieszka Bezat-Jarzębowska Włodzimierz Rembisz Sebastian Jarzębowski |
| author_sort | Agnieszka Bezat-Jarzębowska |
| collection | DOAJ |
| description | Profitability is a complex notion, intertwined with theoretical, socio-economic, and modern economic considerations. While traditionally linked to monopoly advantages, contemporary views broaden this to include shareholder value creation. In agriculture, profitability faces impediments such as rising input costs, market volatility, and economic disparities, emphasizing technological innovation, market conditions, and policy as crucial determinants. This study presents an econometric simulation model to analyze and forecast wheat production profitability in Poland from 2023 to 2027, providing insights into production efficiencies, market dynamics, and policy impacts. Using a system of recursive equations, the model forecasts profitability, integrating econometric techniques with expert insights. It examines variables like resource use, production levels, and price changes, validated through FADN data. The findings reveal that price relations and production efficiencies are the key to profitability. The model highlights market volatility, particularly through “price scissors”, as the main factor influencing profitability. Favorable price conditions significantly boost profitability and incentivize production. The model is a critical tool for analyzing wheat profitability, highlighting the influence of market and policy changes. Future work could extend the model’s use to other regions or crops, incorporating advanced technologies to improve accuracy. This study offers valuable insights for agricultural economics, aiding stakeholders in strategic decision-making. |
| format | Article |
| id | doaj-art-770cd5c78fef48aa9baa9b5faee1e3ba |
| institution | OA Journals |
| issn | 2077-0472 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Agriculture |
| spelling | doaj-art-770cd5c78fef48aa9baa9b5faee1e3ba2025-08-20T01:53:37ZengMDPI AGAgriculture2077-04722024-10-011411191010.3390/agriculture14111910Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market DynamicsAgnieszka Bezat-Jarzębowska0Włodzimierz Rembisz1Sebastian Jarzębowski2Department of Agricultural Markets and Quantitative Methods, Institute of Agricultural and Food Economics, 20 Swietokrzyska Street, 00-002 Warsaw, PolandDepartment of Agricultural Markets and Quantitative Methods, Institute of Agricultural and Food Economics, 20 Swietokrzyska Street, 00-002 Warsaw, PolandDepartment of Economics, Kozminski University, 57/59 Jagiellonska Street, 03-301 Warsaw, PolandProfitability is a complex notion, intertwined with theoretical, socio-economic, and modern economic considerations. While traditionally linked to monopoly advantages, contemporary views broaden this to include shareholder value creation. In agriculture, profitability faces impediments such as rising input costs, market volatility, and economic disparities, emphasizing technological innovation, market conditions, and policy as crucial determinants. This study presents an econometric simulation model to analyze and forecast wheat production profitability in Poland from 2023 to 2027, providing insights into production efficiencies, market dynamics, and policy impacts. Using a system of recursive equations, the model forecasts profitability, integrating econometric techniques with expert insights. It examines variables like resource use, production levels, and price changes, validated through FADN data. The findings reveal that price relations and production efficiencies are the key to profitability. The model highlights market volatility, particularly through “price scissors”, as the main factor influencing profitability. Favorable price conditions significantly boost profitability and incentivize production. The model is a critical tool for analyzing wheat profitability, highlighting the influence of market and policy changes. Future work could extend the model’s use to other regions or crops, incorporating advanced technologies to improve accuracy. This study offers valuable insights for agricultural economics, aiding stakeholders in strategic decision-making.https://www.mdpi.com/2077-0472/14/11/1910profitability changesimulation modelwheat market |
| spellingShingle | Agnieszka Bezat-Jarzębowska Włodzimierz Rembisz Sebastian Jarzębowski Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics Agriculture profitability change simulation model wheat market |
| title | Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics |
| title_full | Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics |
| title_fullStr | Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics |
| title_full_unstemmed | Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics |
| title_short | Maintaining Agricultural Production Profitability—A Simulation Approach to Wheat Market Dynamics |
| title_sort | maintaining agricultural production profitability a simulation approach to wheat market dynamics |
| topic | profitability change simulation model wheat market |
| url | https://www.mdpi.com/2077-0472/14/11/1910 |
| work_keys_str_mv | AT agnieszkabezatjarzebowska maintainingagriculturalproductionprofitabilityasimulationapproachtowheatmarketdynamics AT włodzimierzrembisz maintainingagriculturalproductionprofitabilityasimulationapproachtowheatmarketdynamics AT sebastianjarzebowski maintainingagriculturalproductionprofitabilityasimulationapproachtowheatmarketdynamics |