Abstract
When examining operating profits in agriculture and agricultural production-related businesses based on the latest data for 2022, operating profits from vegetable cultivation in particular are attracting attention. For example, it has been confirmed that a vegetable farm of 30.0 hectares or more can achieve annual operating profits of up to 14.1 million yen. This indicates that large scale vegetable production is a profitable sector. Generally speaking, agricultural production-related businesses encompass everything from production to processing and sales of agricultural products, which supports the overall profits of the business. In particular, in recent years, increased added value of agricultural products and expanded access to new markets have contributed to increased business revenue. Furthermore, looking at the trend in operating profits in agricultural management, it is clear that efficient management and the introduction of technological innovations are important. For example, improved efficiency through the use of automation technology and data analysis has led to cost reductions and improved productivity, contributing to increased operating profits. Overall, the agricultural economy in 2022 is characterized by large-scale vegetable cultivation being the main source of operating profits, with diversification and efficiency improvements in agricultural production-related businesses driving growth in business revenue. Technological innovation and understanding of market trends will continue to be key to sustainable agricultural management.
Operating profit
Looking at recent trends in agricultural operating profits, at the peak in 2019, operators farming less than 5.0 hectares of vegetables recorded profits of 46.4 million yen, but since then there has been a downward trend. As of 2022, the category’s recurring profits are down about 3.96% from their peak. This decline is likely due to several factors. First, rising costs in agricultural management are having an impact. Labor shortages and rising material costs are pushing up production costs and squeezing profit margins. Additionally, increased natural disasters and disease caused by climate change are also impacting revenues. Vegetable cultivation in particular is sensitive to changes in temperature and precipitation, and these factors directly affect yield and quality. Additionally, changes in market conditions are also impacting profits. There is an increasing need for production and sales strategies that can respond to changes in consumer tastes and purchasing patterns. As demand for organic and sustainable products continues to grow, there is a need to establish production systems that can match this demand. However, at the same time, advances in technological innovation and data analysis are helping to improve production efficiency. The introduction of agricultural IoT and precision agriculture has improved the accuracy of production management, contributing to cost optimization and risk reduction. As a result, farmers are seeking strategies to ensure sustainable profitability while adapting to a changing environment. Leveraging technology and sensitivity to market needs will be key to future profits.
The maximum is 46.4Myen[2019] of Vegetables less than 5.0ha, and the current value is about -3.96%
Business income
Regarding agricultural business income, based on data from 2022, operators who farm less than 5.0 hectares of vegetables have a particularly notable presence. The largest business income in this category was 1.06 billion yen, the average was 358 million yen, and the total reached 2.51 billion yen. There are several factors behind this trend. First of all, in vegetable cultivation, which is dominated by small-scale farmers, efficient production and securing sales channels are the keys to success. As consumers become increasingly health-conscious and safety-conscious, emphasis is being placed on quality control and compliance with safety standards, which is opening up access to high-added-value markets. Additionally, as can be seen from the fact that total agricultural business income was 2.51 billion yen, it appears that diverse agricultural activities are complementing each other and growing. For example, livestock farming and orchards are also important sources of income, and specialized production techniques and market strategies in each field support profitability. However, since income from agricultural businesses is affected by external factors such as market fluctuations and natural disasters, ensuring stable management is a challenge. This encourages the adoption of technological innovation and sustainable production methods, which contribute to stabilizing incomes. Overall, agricultural business income in 2022 is expected to be diversified, especially from vegetable cultivation, with production efficiency and market responsiveness showing to be the keys to success. In the future, efforts will be required to pursue sustainable profitability while improving adaptability to environmental changes.
The maximum is 1.06Gyen[2019] of Vegetables less than 5.0ha, and the current value is about 5.32%
Agricultural production related business
In agricultural production-related businesses, the latest data for 2022 shows that businesses with less than 5.0 hectares of vegetable land are particularly noteworthy. The maximum business revenue in this category is 10 million yen, indicating high profitability despite its small scale. This is thought to be due to increased consumer interest in food safety in recent years and the promotion of local production and consumption. A characteristic of vegetable agricultural production businesses of less than 5.0 hectares is that production and sales are closely tied to the local community. Although they are small-scale farmers, they focus on growing high-quality vegetables and approach consumers directly through farm shops and local markets. This builds trust between producers and consumers and promotes shared value. In addition, improving profitability in this sector will require a suitable combination of advances in production technology and marketing strategies. For example, there is an increasing trend towards the introduction of organic and greenhouse farming, as well as sales promotion using digital marketing and social media. On the other hand, livestock farming and orchards also play important roles in agricultural production-related businesses as a whole. In these fields, rapid response to various production technologies and market needs is essential to maintaining and growing profitability. For agricultural production-related businesses to prosper, it is necessary to achieve sustainable agricultural management, and effective use of local resources and minimizing the environmental burden are key issues. Overall, agricultural production-related projects in 2022 were notable for small-scale, specialized vegetable cultivation, contributing to local economies and food security. Going forward, we will need to aim for the development of sustainable agriculture while responding flexibly to further technological advances and changes in the market.
The maximum is the latest one, 10Myen of Vegetables less than 5.0ha
Operating income
Looking at the 2022 data on operating profits in agriculture, operators with less than 5.0 hectares of vegetable farming are particularly noticeable. The maximum operating profit in this category was 32.5 million yen, the average was 147,000 yen, and the overall total was 1.03 million yen. There are several factors behind smallholder farmers recording high operating profits. First, consumers have become increasingly concerned about food safety in recent years. Emphasis is placed on locally based agricultural production, and by strengthening direct ties with consumers, the region is gaining competitiveness in the high value-added market. In particular, the promotion of organic farming and local production and consumption is increasing profit margins. Advances in technological innovation are also contributing to improved operating profits. The introduction of agricultural IoT and precision agriculture has led to improved production efficiency and quality control. This has enabled us to reduce production costs and stabilize yields, leading to increased operating profits. On the other hand, low operating profits in agriculture in general have also emerged as an issue. Fluctuations in market prices and rising production costs are putting pressure on profitability, especially in large-scale agriculture, livestock farming and orchards. In order to address these challenges, it is necessary to review efficient management strategies and promote sustainable agricultural management. Overall, operating profits in agriculture are expected to remain high in 2022, driven by smallholder farmers and their important role in the local economy. Leveraging technology and business strategies that are sensitive to market needs will continue to be essential to increasing profits.
The maximum is 32.5Myen[2019] of Vegetables less than 5.0ha, and the current value is about -18.4%
Comments