EFFECTS OF AVERAGE PRODUCTION AND PRICE RISK ON GROSS MARGIN FOR CEREAL PRODUCTS OBTAINED CONVENTIONALLY AND IN ORGANIC FARMING

Ana URSU
RESEARCH INSTITUTE FOR AGRARIAN ECONOMY AND RURAL DEVELOPMENT
Cor­re­spond­ing author email: ursu.ana @ iceadr.ro
Abstract: The study aims to present from a tech­ni­cal-eco­nom­ic point of view aspects relat­ed to the cost behav­iour, accord­ing to the cost-vol­ume-prof­it analy­sis mod­el and the sen­si­tiv­i­ty analy­sis, of cere­al prod­ucts (maize and wheat) grown in con­ven­tion­al and organ­ic farm­ing sys­tems. In Roma­nia, accord­ing to EUROSTAT sta­tis­ti­cal data, in the peri­od 2014-202, the pro­duc­tion har­vest­ed with wheat was increas­ing, on aver­age by 823 thou­sand t/year, com­pared to organ­ic wheat, which decreased, on aver­age by 3.3861 thou­sand t/year. Maize pro­duc­tion har­vest­ed increased, on aver­age, by 2771.3 thou­sand t/year, as pro­duc­tion yield increased by 1.184 t/ha, while organ­ic maize pro­duc­tion decreased by 12.413 thou­sand t/year.  Pro­duc­tion costs vary accord­ing to planned pro­duc­tion lev­els, with dif­fer­ences being deter­mined by agro-tech­ni­cal con­di­tions (irri­gat­ed/non-irri­gat­ed). Esti­mat­ed prof­it for 2022 are €86/ha for non-irri­gat­ed wheat and €171/ha for irri­gat­ed wheat, and €91/ha (non-irri­gat­ed) and €161/ha (irri­gat­ed) for organ­ic wheat. For maize, the esti­mat­ed gross prof­it is 94 euro/ha for non-irri­gat­ed and 225 euro/ha for irri­gat­ed, and for organ­ic maize the gross prof­it to be obtained is 125 euro/ha for non-irri­gat­ed and 181 euro/ha for irri­gat­ed. How­ev­er, in the con­text of the 2021/2022 pro­duc­tion year the effects of all fac­tors (polit­i­cal con­flict in Ukraine, grain mar­ket, price volatil­i­ty, infla­tion, pro­duc­tion costs and grow­ing con­di­tions — cli­mate con­di­tions, soil, pedo­log­i­cal drought, a etc.) com­plete the eco­nom­ic risk pro­file for the stud­ied cere­als.
Key­words: cost-vol­ume-prof­it analy­sis, sen­si­tiv­i­ty analy­sis, price volatil­i­ty, wheat, maize
JEL clas­si­fi­ca­tion: O12, P50, Q18, Q57