The Issue of Stability of Revenue in Pig Production in Poland

Włodzimierz Rembisz and Danuta Zawadzka

No 319698, Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej from Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI)

Abstract: Pig production is subject to fluctuations due to the pig cycle. These fluctuations cause that the supply of pork is either excessively high or too low in relation to a given demand assumed on the ceteris paribus principle. In the former case, the prices of pork, especially livestock, are high, and in the latter, they are low. As a result, the revenue of agricultural producers changes accordingly. It can be assumed that the negative revenue effects of the decrease in purchase prices are compensated by the positive effects of higher sales of porkers. Therefore, it is assumed that the volatility of revenues should be lower than that of both components. The purpose of this article is to verify this view, which can be regarded as a hypothesis. To be more exact, the paper attempts to answer the question whether there is volatility or relative stability of revenues in the pig market. This issue is important not only for the producers, but also for the agricultural policy. Using simple statistical methods, the authors evaluate the variability of revenues between 2005 and 2020, i.e. after Poland’s accession to the European Union. Recognizing that this was not a homogeneous period, the research also involved the revenues in two sub-periods, i.e. 2005-2012 and 2013-2020. The adopted assumption and the research hypothesis about the relative stability of revenue due to a certain interchangeability of the price level and the purchase volume were only quite incomplete for the period 2005-2012. For period 2013-2020, the analysis of charts, coefficients of variation and correlation gave different results that did not allow for confirming the assumption and hypothesis.

Keywords: Agribusiness; Agricultural and Food Policy (search for similar items in EconPapers)
Date: 2021-06-21
New Economics Papers: this item is included in nep-agr and nep-ban
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iafepa:319698

DOI: 10.22004/ag.econ.319698

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