IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v13y2023i7p1403-d1194240.html
   My bibliography  Save this article

Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020

Author

Listed:
  • Andrzej Parzonko

    (Department of Economics and Organization of Enterprises, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, Poland)

  • Anna Justyna Parzonko

    (Department of Tourism, Social Communication and Consulting, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, Poland)

  • Piotr Bórawski

    (Department of Agrotechnology and Agribusiness, Faculty Agriculture and Forestry, University of Warmia and Mazury in Olsztyn, 10-719 Olsztyn, Poland)

  • Ludwik Wicki

    (Department of Economics and Organization of Enterprises, Faculty of Economics, Institute of Economics and Finance, Warsaw University of Life Science SGGW-Warsaw, 02-787 Warszawa, Poland)

Abstract

The European Union dairy sector plays a significant role in supplying dairy products to consumers all over the world. The aim of this study was to examine changes in the return on equity as one of the main financial indicators determining the economic viability of EU dairy farms in the years 2004–2020. The analysis based on the DuPont model was used to determine the main drivers of return on equity in dairy farms from the five studied EU countries. The research results show that (1) the lowest return on equity in the years 2004–2020 was calculated for average farms from the Netherlands, and the reason for this phenomenon was the use of significant assets in the production, mainly resources that are very expensive in the Netherlands—land and human labor; (2) the highest return on equity was characteristic of dairy farms from France, and the factor strongly determining the favorable value of this ratio was the high degree of financing assets with low-interest loans and credits; (3) despite the lowest production potential and small scale of milk production, average Polish farms in the years 2004–2020 were characterized by a relatively high return on equity, which ranged from 4.97% to 14.9%.

Suggested Citation

  • Andrzej Parzonko & Anna Justyna Parzonko & Piotr Bórawski & Ludwik Wicki, 2023. "Return on Equity in Dairy Farms from Selected EU Countries: Assessment Based on the DuPont Model in Years 2004–2020," Agriculture, MDPI, vol. 13(7), pages 1-16, July.
    • Handle: RePEc:gam:jagris:v:13:y:2023:i:7:p:1403-:d:1194240
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/13/7/1403/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/13/7/1403/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bazyli Czyżewski & Andrzej Czyżewski & Łukasz Kryszak, 2019. "The Market Treadmill Against Sustainable Income of European Farmers: How the CAP Has Struggled with Cochrane’s Curse," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    2. Giulio Fusco, 2021. "Twenty Years of Common Agricultural Policy in Europe: A Bibliometric Analysis," Sustainability, MDPI, vol. 13(19), pages 1-15, September.
    3. Kleinhanss, Werner, 2015. "Competitiveness of the major types of agricultural holdings in Germany," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 244571, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    4. Ziętara, Wojciech & Adamski, Marcin, 2018. "Competitiveness of the Polish dairy farms at the background of farms from selected European Union countries," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 276374, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    5. Abele Kuipers & Agata Malak-Rawlikowska & Aldona Stalgienė & Anita Ule & Marija Klopčič, 2021. "European Dairy Farmers’ Perceptions and Responses towards Development Strategies in Years of Turbulent Market and Policy Changes," Agriculture, MDPI, vol. 11(4), pages 1-24, March.
    6. Walenty Poczta & Joanna Średzińska & Maciej Chenczke, 2020. "Economic Situation of Dairy Farms in Identified Clusters of European Union Countries," Agriculture, MDPI, vol. 10(4), pages 1-22, March.
    7. Rađenović, Žarko & Krstić, Bojan & Marković, Milan, 2022. "Economic Performance of Agriculture in the European Union Countries," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 320080, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    8. Ewa Kiryluk-Dryjska & Agnieszka Baer-Nawrocka & Obinna Okereke, 2022. "The Environmental and Climatic CAP Measures in Poland vs. Farmers’ Expectations—Regional Analysis," Energies, MDPI, vol. 15(13), pages 1-13, June.
    9. Andrzej Hornowski & Andrzej Parzonko & Pavel Kotyza & Tomasz Kondraszuk & Piotr Bórawski & Luboš Smutka, 2020. "Factors Determining the Development of Small Farms in Central and Eastern Poland," Sustainability, MDPI, vol. 12(12), pages 1-21, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yangxueyi Hu & Abeer Hassan & Sehrish Atif, 2024. "Examining the Interplay between CEPSA’s ESG Performance and Financial Performance: An Overview of the Energy Sector Transformation," Sustainability, MDPI, vol. 16(7), pages 1-28, March.
    2. Teodora Tica & Bojan Matkovski & Danilo Đokić & Žana Jurjević, 2023. "Characteristics of the Supply Chain of Tobacco and Tobacco Products: Evidence from Serbia," Agriculture, MDPI, vol. 13(9), pages 1-23, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lukáš Čechura & Zdeňka Žáková Kroupová & Irena Benešová, 2021. "Productivity and Efficiency in European Milk Production: Can We Observe the Effects of Abolishing Milk Quotas?," Agriculture, MDPI, vol. 11(9), pages 1-21, August.
    2. Andrzej Parzonko & Anna Justyna Parzonko & Piotr Bórawski, 2024. "Economic Competitiveness of Dairy Farms from the Top Milk-Producing Countries in the EU: Assessment in 2014–2021," Agriculture, MDPI, vol. 14(1), pages 1-17, January.
    3. Bożena Kusz & Dariusz Kusz & Iwona Bąk & Maciej Oesterreich & Ludwik Wicki & Grzegorz Zimon, 2022. "Selected Economic Determinants of Labor Profitability in Family Farms in Poland in Relation to Economic Size," Sustainability, MDPI, vol. 14(21), pages 1-25, October.
    4. Parzonko, Andrzej, 2023. "Rentowność Kapitału Własnego W Polskich Gospodarstwach Mlecznych Zróżnicowanych Skalą Produkcji W Latach 2005-2020," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2023(3).
    5. Andrzej Parzonko & Piotr Bórawski, 2020. "Competitiveness of Polish dairy farms in the European Union," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(4), pages 168-174.
    6. Hongxia Jin & Lu Lu & Haojun Fan, 2022. "Global Trends and Research Hotspots in Long COVID: A Bibliometric Analysis," IJERPH, MDPI, vol. 19(6), pages 1-14, March.
    7. Elena Toma & Paula Stoicea & Carina Dobre & Adina Iorga, 2023. "The Effect of Eco-Scheme Support on Romanian Farms—A Gini Index Decomposition by Income Source at Farm Level," Agriculture, MDPI, vol. 13(9), pages 1-15, August.
    8. Carolina Feliciana Machado & João Paulo Davim, 2022. "Higher Education for Sustainability: A Bibliometric Approach—What, Where and Who Is Doing Research in This Subject?," Sustainability, MDPI, vol. 14(8), pages 1-15, April.
    9. Marta Guth & Katarzyna Smędzik-Ambroży & Bazyli Czyżewski & Sebastian Stępień, 2020. "The Economic Sustainability of Farms under Common Agricultural Policy in the European Union Countries," Agriculture, MDPI, vol. 10(2), pages 1-20, January.
    10. Yuxue Yang & Xuejiao Tan & Yafei Shi & Jun Deng, 2023. "What are the core concerns of policy analysis? A multidisciplinary investigation based on in-depth bibliometric analysis," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    11. Karolina Pawlak & Luboš Smutka & Pavel Kotyza, 2021. "Agricultural Potential of the EU Countries: How Far Are They from the USA?," Agriculture, MDPI, vol. 11(4), pages 1-21, March.
    12. Dariusz Kusz & Bożena Kusz & Paweł Hydzik, 2022. "Changes in the Price of Food and Agricultural Raw Materials in Poland in the Context of the European Union Accession," Sustainability, MDPI, vol. 14(8), pages 1-21, April.
    13. Diana Elena Micle & Florina Deiac & Alexandru Olar & Raul Florentin Drența & Cristian Florean & Ionuț Grigore Coman & Felix Horațiu Arion, 2021. "Research on Innovative Business Plan. Smart Cattle Farming Using Artificial Intelligent Robotic Process Automation," Agriculture, MDPI, vol. 11(5), pages 1-15, May.
    14. Ziętara, Wojciech, 2020. "Parity Income And Development Possibilities Of Farms In Poland," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2020(2).
    15. Stępień Sebastian & Smędzik-Ambroży Katarzyna & Polcyn Jan & Kwiliński Aleksy & Maican Ionut, 2023. "Are small farms sustainable and technologically smart? Evidence from Poland, Romania, and Lithuania," Central European Economic Journal, Sciendo, vol. 10(57), pages 116-132, January.
    16. Bachev, Hrabrin, 2023. "Разбиране, Оценка И Фактори На Конкурентоспособността На Фермерските Управленчески Структури - Български Пример [Understanding, Assessment, and Factors of Competitiveness of Farming Governing Struc," MPRA Paper 116074, University Library of Munich, Germany.
    17. Zdeňka Náglová & Tamara Rudinskaya, 2021. "Factors Influencing Technical Efficiency in the EU Dairy Farms," Agriculture, MDPI, vol. 11(11), pages 1-14, November.
    18. Bazyli Czyżewski & Marta Guth, 2021. "Impact of Policy and Factor Intensity on Sustainable Value of European Agriculture: Exploring Trade-Offs of Environmental, Economic and Social Efficiency at the Regional Level," Agriculture, MDPI, vol. 11(1), pages 1-19, January.
    19. Bachev, Hrabrin & Koteva, Nina, 2021. "Равнище На Конкурентоспособност На Българските Ферми През 2020г [Competitiveness Level of Bulgarian Farms in 2020]," MPRA Paper 106211, University Library of Munich, Germany.
    20. Sergey S. Yurochka & Igor M. Dovlatov & Dmitriy Y. Pavkin & Vladimir A. Panchenko & Aleksandr A. Smirnov & Yuri A. Proshkin & Igor Yudaev, 2023. "Technology of Automatic Evaluation of Dairy Herd Fatness," Agriculture, MDPI, vol. 13(7), pages 1-19, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jagris:v:13:y:2023:i:7:p:1403-:d:1194240. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.