AGCO net sales down 24.8% year on year

AGCO, the parent company behind brands such as Fendt, Massey Ferguson and Valtra, has reported net sales of $2.6bn for the third quarter, a decrease of 24.8% compared to the third quarter of 2023.

“Low commodity prices and high input costs led to increased conservatism from our dealers and farmers, resulting in ongoing production cuts to help reduce AGCO and dealer inventories,” said Eric Hansotia, AGCO’s chairman, president and chief executive officer.

Net sales for the first nine months of 2024 were approximately $8.8bn, which is a decrease of 17.3% compared to the same period in 2023.

“Record harvests in the northern hemisphere are contributing to higher grain inventories and pressuring crop prices, which combined with elevated input costs, are delaying farmers’ equipment purchasing decisions. Demand for new equipment has softened further in most global markets, particularly as lower farm income persists for crop producers. We continue to expect increased adoption of precision technology, but more challenging farm economics are resulting in weaker global industry demand across most equipment categories. In the first nine months of 2024, retail tractor industry demand fell by an average of 8% across the three major regions,” said Hansotia.

During the first nine months of 2024, western European tractor sales decreased 6%, North American sales decreased 11% and South American tractor sales decreased 9%. AGCO says industry demand in Europe is expected to remain soft for the rest of 2024, as lower income levels pressure demand from arable farmers, while healthy demand from dairy and livestock producers is expected to mitigate some of the decline.