Price volatility in agricultural markets and financial security of enterprises: The role of forward contracts, insurance, and income diversification

Nataliia Shevchenko, Denys Pylypenko
Received: 14.05.2025 Revised: 25.11.2025 Accepted: 26.11.2025
Retrieved from Vol. 28, No. 12, 2025 Pages: 66-78
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Abstract

The purpose of this study was to determine the impact of price risk management tools on ensuring the financial stability of Ukrainian agricultural enterprises in the context of military and macroeconomic instability. The study methodology combined theoretical and empirical approaches and was based on the methods of generalisation, dynamic and comparative analysis, structural-functional analysis, analysis of financial results and case analysis to assess the financial stability of agricultural enterprises in 2020-2025 based on statistical data on the price environment, financial results, and dynamics of the number of business entities. The results showed that price volatility in 2020-2025 affected the financial stability of agricultural enterprises. The index of sales prices of agricultural products decreased from 107.5% in 2021 to 100.4% in 2022, and in 2023-2025 it recovered only to the level of 101.2-103.0%, which indicated that the unstable price environment remained. Revenues of the agricultural sector increased from UAH 796 billion in 2022 to about UAH 2.4 trillion in 2024, and profits – from UAH 88.6 billion to about UAH 327 billion, but this recovery was mainly provided by large agricultural holdings. In particular, Myronivsky Hliboproduct and Kernel have growth indicators Earnings Before Interest, Taxes, Depreciation and Amortization in 2023-2024, it correlated with the active use of forward contracts and exchange-traded hedging instruments, while Astarta showed a stabilising effect of contracts due to the maintenance of cash flows in the sugar segment despite the fall in world prices. Thereby, from 2021 to 2025, 3,416 agricultural enterprises stopped operating, which reflected the high financial vulnerability of small and medium-sized farms. The practical importance of the study lies in the fact that these results can be used by agricultural enterprises, financial managers, and analysts to select effective tools for managing price risks

Keywords

hedging; liquidity; debt burden; cash flows; risks

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Shevchenko, N., & Pylypenko, D. (2025). Price volatility in agricultural markets and financial security of enterprises: The role of forward contracts, insurance, and income diversification. Scientific Horizons, 28(12), 66-78. https://doi.org/10.48077/scihor12.2025.66