- Relative to wages, the price of wheat is reaching rock bottom. It has never been so cheap.
- Year by year we observe a decrease in the value of agricultural produce.
Withdrawals up over 100 percent, and wheat?
According to the Central Statistical Office data, the average salary in Poland is PLN 8,144.33 gross (data from July). The minimum salary is PLN 4,300 gross. In both cases, we observe constant growth. Average wages are even ahead of inflation. In all this, grain prices look miserable. Although that's an understatement. It's very bad.
In 2015, 2.57 tons of wheat were enough to equalize the minimum wage. In turn, in the case of the average wage, it was 5.73 tons. Interestingly, this correlation this year comes full circle, but the same amount of wheat as a decade ago must be sold to the national average to balance the minimum wage.
How many tons of wheat must be sold to balance the level of wages. Prepared by Karol Bogacz
Since 2015, the average salary has increased by 108%. The minimum wage increased by 145 percent during this time. At the same time, the price of wheat increased by 10%.
If, on the other hand, we checked the situation year to year, wheat is cheaper by about 4%. In turn, the minimum wage in 2024 increased by 19.5% compared to 2023. The average salary given by the Central Statistical Office in July is higher by 13% compared to the entire previous year.
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Is it better to burn grain in a furnace than to sell it?
Wheat is no longer worth anything?
The most unfavorable is the equivalence of wheat prices with wages in the domestic economy. Never before has it been necessary to sell so much grain to compensate for a specific wage. Currently, over 5.7 tons of wheat must be sold to obtain an amount equal to the minimum wage. A year ago it was 4.6 t. The best correlation is in the years 2021 – 2022, when the amount of the minimum wage was balanced by 2.07 and 2.15 t of wheat, respectively. But as it turns out, even when wheat was priced at PLN 1,400 – 1,500/t, these were not amounts that definitely caught up with the level of wages. Let us note here that, for example, in 2015 or 2018, about 2.5 tons of grain was already enough. to equalize the national minimum. However, what is important. We are observing a disturbing trend in which grain prices are generally too low in relation to wages in the domestic economy. For 10 years, almost every year more has to be sold so that the farmer can actually afford even less.
Currently, to equalize the minimum wage, you have to sell more than 120%. more wheat than in 2015 and over 170% more than in 2022. In relation to the previous season, even more than 20 percent must be sold. more wheat to get an amount like the minimum wage.
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How much should wheat cost this year?
If we used e.g. 2015 as the base year, then taking into account the increase in the minimum wage by 145% since then, wheat would have to cost PLN 1,660/t. And such a minimum from the base year adopted in this example means the wheat price will be at least PLN 1,410/t (as is the increase in the average wage).
Not only has wheat not kept pace with inflation, but it has also been worth less and less over the years. And this is a very big problem. Of course, global markets are key here. But aren't world markets also governed by other raw materials? Things are different in other industries, but only agricultural produce has lost so much value (compared to most raw materials and energy prices).
Someone may probably say that these are separate issues. But not completely. They show the value of agricultural produce against the background of both inflation and earnings in the economy. Someone else will say that average salaries are somewhat detached from reality. That's why we refer prices to the minimum rates applicable in the country. The price of wheat was also slightly higher than PLN 750/t in the discussed case, but many transactions were at PLN 700/t (or even lower), therefore the valuation was averaged.
Unfortunately, the saying "pay like grain" means something completely different than it used to. Now it is a symbol of low prices.
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