AGCO Expects Another Down Year in 2025

AGCO on Thursday reported a difficult fourth quarter and full-year financial results.

AGCO net sales of $2.9 billion for the fourth quarter of 2024 were down 24% from the fourth quarter of 2023. Net sales for the full year were $11.7 billion, a decline of 19.1% compared to all of 2023.

For the three months ending its fiscal year (Dec. 31, 2024), AGCO reported a North American net sales decline of 38.6%, compared to the same three- month period in 2023. For all of 2024, AGCO reported net sales were down 24.7% compared to all of 2023.

To contain the impact of its sales decline, AGCO has focused on cutting production costs and reducing inventory. The company cut production hours 33% in the fourth quarter and ended the year with reduced company and dealer inventory.

AGCO's experience in 2024 is not unlike that of other ag equipment manufacturers. Across the North American market (counting all manufacturers), retail tractor sales declined 13% in 2024 compared to the prior year. Combine unit sales were down 22% in 2024 compared to 2023. Lower projected farm income and a newer, refreshed fleet are expected to continue to pressure industry demand in 2025, particularly on sales of larger equipment.

AGCO expects net sales for 2025 to be $9.6 billion, reflecting lower sales volume and flat pricing. If realized, AGCO's net sales performance would be down another $2 billion compared to 2024.

"Demand for new equipment has softened further in most global markets, particularly as lower farm income persists for crop producers," said Eric Hansotia, AGCO's chairman, president and CEO.

"We continue to expect increased adoption of precision technology, but challenging farm economics are resulting in weak global industry demand across most equipment categories," he said.

"In 2025, we will continue to execute our Farmer-First strategy strengthened by the portfolio moves and aggressive cost control actions, including our ongoing restructuring program," Hansotia continued. "We will continue our investments in premium technology, smart farming solutions and enhanced digital capabilities."

AGCO's Farmer-First strategy prioritizes helping farmers be more productive, efficient and sustainable.

Other AGCO markets are reporting results similar to those in North America. AGCO's South American region saw net sales decline 38.6%. In Europe and the Middle East, net sales declined 10.9% in 2024, although some of that decline was offset by increased sales in Spain and Turkey.

Dan Miller can be reached at dan.miller@dtn.com

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