AGCO: Poor Sales, Price Boost, Better Outlook

In its first financial report of the 2025 fiscal year, AGCO is reporting net sales of $2.1 billion. That is a decrease of 30% compared to the first quarter of 2024.

AGCO also indicated, even with sharp controls on costs and ongoing negotiations with suppliers on pricing, the manufacturer already has levied price increases on service parts and will shortly do the same on machinery.

AGCO reports its regional net-sales performances are negative in the first quarter, compared to the first three months of 2024 -- off 23.0% in its Europe/Middle East market, down 33.9% in North America and off 6.1% in South America. Sales in AGCO's Asia/Pacific/Africa markets are down 38.0% in the first quarter of 2025, compared to a year ago.

In North America, AGCO felt the impact of this down equipment cycle most in sales of high horsepower tractors, sprayers and combines. North America sales totaled $395.6 million from January to March 2025, compared to $601.1 million during the same period last year.

"We are seeing a mix of positive signs and risks around the world, requiring us to remain agile," said AGCO's Chairman, President and CEO, Eric Hansotia, in a release from the manufacturer. "The underlying fundamentals in many parts of the world have begun to trend upward with farmer sentiment in Europe improving, U.S. corn prices rising and corn stocks-to-use ratios at lower levels. However, the global agricultural equipment market is volatile due to tariffs and shifting export demand for grain."

AGCO's net sales for all of 2025 are expected to come in at about $9.6 billion. Net sales for the full year of 2024 were about $11.7 billion.

After AGCO's earnings call on Thursday, DTN/Progressive Farmer spoke with Hansotia about the first quarter results and AGCO's technology stream, such as its OutRun autonomous grain cart solution and, announced just this week, its new PTx Trimble NAV-960 advanced guidance system.

Here are the edited portions of the conversation with Hansotia.

DTNPF: What is your view of the first quarter 2025 earnings report?

Hansotia: I think we delivered a great first quarter. Essentially, (it's) a reflection of keeping our eyes on the farmer, trying to solve their main pain points, and making easy solution(s) for them to use. In addition to that, we've been working hard all last year taking cost out of the business, and that showed up even stronger than we had (anticipated). We think that's something to help the farmer, that in these times when the farmer is under pressure for margins and there's a lot of uncertainty, we're doing everything we can to get as much cost out. With tariff discussions and what may happen to trade flows, there's going to be pricing pressure that's going to try and work its way into the market, and we're trying to minimize that for the farmer.

DTNPF: Controlling costs, reducing inventory, managing production hours. Those are your main management levers?

Hansotia: Right. We cut production 32% in the quarter. And we're trying to help our dealers right size their inventory. We still have a little bit of work to do. We are starting to have discussions about the potential to run out on a few of the models because customers continue to buy at the retail level (and) dealers are holding off ordering more. We're starting to take actions to make sure that we don't run out in quarter three or quarter four (2025). We're hearing out of the Agrishow in Brazil this week (that) farmer sentiment is up. The market wants to find the bottom.

DTNPF: You believe you're seeing the bottom of the market?

Hansotia: Let me be precise with my comments. What we're seeing is in Asia and South America, we expect the market to be up this year. In those markets, we're seeing the market starting to recover and they've already found the bottom. In North America, we're still predicting large ag to be down around 30%. North America is where the most uncertainty is, largely around the tariff situation and low profitability for the farmer. Europe is always a pretty stable market, and that's about half our business. We gained market share on all three of our brands in Europe for the first quarter. We're feeling good about Europe, feeling (good) about South America.

DTNPF: You've accounted for tariffs in AGCO's financials?

Hansotia: Yes, in simple terms. It's the 10% across the board tariffs (enforced) today, plus the tariffs on steel. We've incorporated (those) into our plan ... some of the higher-level tariffs we haven't put into the plan, because I think the intent, at least what's been broadcast, is to create deals on many of those situations over that 90-day window (announced by President Trump) to land in a different place. But we don't know how that's going to shake out, for which countries, at what level, so we haven't put that into the plan, yet. But right now, we've absorbed what's in the market today.

DTNPF: Do you expect to increase prices for machinery in the U.S., in North America?

Hansotia: With our supply base and with us (reducing) we pass on the minimum to our farmers. We've passed on a little bit of price (increase) in service parts, already. One of our competitors (CNH) announced a price increase (Thursday) today on whole goods. We'll be doing the same shortly (on machines).

DTNPF: AGCO continues to invest in technology.

Hansotia: We earned the Davidson Prize for OutRun (autonomous grain cart solution). We put it on a tractor hauling a grain cart and you can have no operator in the tractor while you're unloading on the go with the combine. This week, we're launching our new PTx Trimble NAV-960. It is by far the most advanced guidance system we've ever launched.

DTNPF: Tell us more about the OutRun autonomous grain cart solution.

Hansotia: We ran it (last year) with paying customers on their farms. This year we're in limited commercial release. We had a first batch go out and we sold out on that. We're building more and expect by the end of the year what we sold out on those. Customers (put) it on either our brand (Fendt) or competitive brands of tractors. It makes that tractor autonomous. When the combine is harvesting, (the operator) summons the tractor. Tractor comes around and you unload on the go. When the combine is empty, you release (the tractor), and it can go off to the side of the road and unload into a semi. That's the first application of that tech platform. We're going to use that same tech platform to do other applications (such as) fully autonomous tillage. There are several applications (coming).

DTNPF: What are your customers telling you about autonomy?

Hansotia: When you talk to the farmers, they say the labor savings is one thing. But the farm benefit is much bigger. The farmer looks at their harvesting window like a bell curve -- there's an ideal time to harvest. And once you get past that, you start having losses. If you can avoid getting outside the ideal window, you gain profitability from the harvest application. Farmers are telling us that the (autonomous produced) benefit of grain yield and grain savings is bigger than the labor savings. The (harvest) application is done during a better window, in a better way than it was done before. That's when a farmer starts lighting up. So, that's our objective.

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

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