The development of the profitability of agricultural enterprises and its causes

The article presents the results of the development of the profitability of agricultural enterprises in the years 2017-2022. The results are compared with the sectors: Food Production and Food Retail. The Albertina database was used. The profitability of agricultural enterprises is significantly below average (roughly half) compared to other sectors. Intercompany volatility is also lower. On the other hand, year-on-year volatility (volatility over time) is higher. The year 2022 is characterized by high inflation and a significant increase in profitability in all sectors. The causes of change in profitability (ROA) were analyzed. Logarithmic and exponential decomposition methods were used. The reasons for the difference in profitability are different. There was a sharp increase in sales in all sectors. In the Agriculture sector, material costs grew faster than sales. Higher profitability is achieved due to depreciation (which remained fixed as sales increased), especially labor costs (which grew significantly slower than sales). In the food production sector, depreciation significantly impacts profitability (they again remained the same despite growing sales). The influence of wages is weaker than in the Agriculture sector. The average salary here more closely followed inflation. In the Food Retail sector, the main reason for the increase in ROA is higher selling prices. Selling prices rose faster than the purchase costs of goods and materials.