Farm slump dragging into 2025 to weigh on machinery maker AGCO
Net sales in 2025 will be about $9.6 billion
Shares of agriculture machinery maker AGCO Corp. fell the most in more than a month as the agriculture machinery maker said it will be pressured next year as farmers keep struggling with low crop prices.
Net sales in 2025 will be about $9.6 billion, the Georgia-based company said Thursday at its annual investor meeting. The outlook — its first for the coming year — is down from an estimated $12 billion in 2024, with the decline partly tied to its divestment of its grain-storage and livestock business.
Retail sales next year in the key North American market are expected to drop by 25%.
“It’s no surprise to anyone in the room here: the ag industry is continuing to get weaker,” Chief Financial Officer Damon Audia said at the meeting in New York.
AGCO shares fell as much as 6.1%, the most since Nov. 5.
Growers have been boosting production of grain and oilseeds since Russia’s 2022 invasion of Ukraine upended world crop markets and sent prices soaring. Now, futures for crops such as soybeans are hovering near four-year lows, leaving farmers with less to spend on new equipment. Meanwhile, President-elect Donald Trump has promised to levy tariffs on goods from China, Mexico and Canada — potentially disrupting markets for crops and machine parts.
Still, AGCO said it’s been increasing market share as more customers adopt its high-end Fendt tractors and the PTx technology platform that helps farmers raise crops more precisely.
“We’ve got a much softer market,” said Chief Executive Officer Eric Hansotia. “There’s usually, in every business cycle, one year where it goes from very good to not so good, and there’s a big correction. We’re in the middle of that right now.”
— By Michael Hirtzer (Bloomberg)
