Profitability of Russian agricultural production could drop to 16% in 2023 - Agriculture Ministry

MOSCOW. July 20 (Interfax) - The profitability of agricultural production in Russia in 2023 could decrease to 16% from 20% in 2022 (both figures benefit from subsidies), Deputy Minister of Agriculture Elena Fastova said at the Where is the Margin 2023 summer conference on Thursday in Moscow.

"Results from 2022 show that profitability decreased to 20% with subsidies. This year, we see that the price of grain is still low, so we'll assume lower profitability at around 16%," the Deputy Minister said. "Let's see how the price behaves until the end of the year; we actually have another six months."

Another factor in the decline in profitability is wage growth, Fastova said. "Wage growth also affects the final result. And this growth is happening, and it's due to competition [with other industries], and the fact that there are fewer personnel in the countryside," she said.

Fastova recalled that growth of agricultural production last year reached 10.2%. For the first five months of this year, it was 3% versus 7% a year ago. A slowdown in growth rates this year "is an expected situation, since it is impossible to grow year by year at the same rate as last year."

Food industry production increased 5.3% over the first five months (and by 0.4% for all of 2022) against 1.6% the same period a year ago. "This makes us happy, because we understand we need to develop processing, as it is our added value," she said.