The Impact of the Input-Output Price Ratio on the Profitability of Hungarian Agricultural Enterprises Between 2007 and 2021

This research focuses on the link between the input-output price ratio and agricultural profitability. Analyzing agricultural profitability is a key issue for the development of the sector, with one of its most important components being the evolution of the agricultural price index. This research presents an analysis of the agricultural price ratio in the recent period, with a focus on the correlations between production direction and profits. The study analyses Hungarian agricultural enterprises on the basis of the agricultural price indices of the Hungarian Central Statistical Office (HCSO) and uses data from the agricultural price index and the agricultural database of the Test Farm Information System operated by the Agricultural Economics Research Institute. The analysis works with statistically validated data from 2007 to 2021. Based on our results, changes in input-output prices are a good predictor of the profitability rate of farmers in the current and future years. This provides an opportunity to optimally allocate agricultural subsidies and to strengthen the loss-compensation effect.