Management Theory and Studies for Rural Business and Infrastructure Development, Volume 15

Relationships of oil prices and activity results of Lithuanian wheat growers

Vidas Lekavičius, Viktorija Bobinaitė, Arvydas Galinis

Abstract

Globalization process makes an influence on different sectors of world economy. Lithuanian
agriculture is influenced as well. Subject to resources used and fluctuations of world prices, profit
of Lithuanian farmers could change. To be aware of this, it was valuable to make an analysis on relationships
between fluctuations of world oil prices and changes in revenue and costs of Lithuanian
farmers. The results of this analysis showed that mineral fertilizers, depreciation and fuel costs made
a supreme part of all costs of cereal and rape growing. Revenue of the farmers in Lithuania depended
both on the market prices of produced good, and nature conditions. It was determined that
linear relationships between world oil prices and prices of wheat, mineral fertilizers and diesel prices
are statistically significant. Regression model indicated that elasticity of mineral fertilizers and
fuel prices to world oil price is better than elasticity of wheat price to oil price. Higher elasticity of
revenue elements and lower elasticity of costs elements to world oil price are useful to farmers.

Keyword(s): fuel, mineral fertilizers, oil price, substitute, wheat price


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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.